New York court orders Tether to provide USDT reserve documents

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A New York court ordered Tether to provide financial documents showing support for USDT.

According to the order, Tether must produce all trade transfer records of any cryptocurrency or stablecoins by the company and other documents such as “ledgers, balance sheets, income statements, cash flow statements and profit and loss”.

Tether must also provide information about its accounts at Bittrex, Bitfinex and Poloniex.

Tether objected to the order

The stablecoin issuer opposed the order, saying it was overkill and burdensome, but Judge Katherine Polk Failla disagreed. According to her, the complainants specified why the information was necessary.

Judge Failla wrote:

“Documents sought in the Request for Proposal Transactions appear to relate to one of the Plaintiffs’ key allegations: that the…Defendants engaged in cryptocurrency transactions using unsecured USDT, and that these transactions “were strategically timed.” to inflate the market”.

The order is linked to a lawsuit that accuses Tether and Bitfinex of manipulating crypto markets to the detriment of traders.

The plaintiffs claim that Tether lied about supporting USDT and also alleged that the stablecoin was used to buy Bitcoin (BTC), inflating the crypto market and causing the eventual crash.

According to the plaintiffs, Tether caused over $1 trillion in damage to the crypto market.

Tether did not respond to a request for comment at press time.

Algorithmic stablecoin faces 2-year ban

Bloomberg reported that U.S. lawmakers are working on a comprehensive stablecoin regulation bill that could have a huge effect on industry operations.

According to the report, the lawmakers’ bill would ban algorithmic stablecoins similar to TerraUSD for the next two years. The report stated that it would be illegal to create or issue new “endogenously backed stablecoins”.

The bill would also allow banks and non-banks to issue stablecoins based on established procedures. However, companies would be prevented from mixing their assets with customer funds – stablecoins, private keys and cash – in the event of bankruptcy.

Meanwhile, the bill would direct the Federal Reserve to study the effect of a proposed digital dollar on the economy and the financial privacy of citizens.

Terra’s implosion has led to increased calls for regulation of the fledgling industry.

About Alexander Estrada

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