Tether, the prominent stablecoin provider responsible for Tether USDT ($1.00), has proactively addressed concerns surrounding its operational decisions. Recent disclosures from the New York Attorney General (NYAG) shed light on Tether’s deactivation of approximately 29 accounts owned by influential figures in the cryptocurrency industry during 2021. Although the specific reasons for these account terminations remain undisclosed, Tether has expressed its reluctance to comment on individual relationships while emphasizing its adherence to rigorous compliance checks.
Tether’s robust onboarding procedures require all individuals to undergo comprehensive compliance checks upon joining, followed by ongoing monitoring in accordance with the company’s compliance policies. Noteworthy names among the deactivated accounts include MoonPay, BlockFi, CMS Holdings, and Galois Capital.
The NYAG investigation, which concluded in February 2021, uncovered documents that extended until June of the same year. However, sensitive information within these documents has already been redacted. The investigation centered around Tether and its sister company Bitfinex, concerning allegations of misappropriating $850 million. During the investigation, iFinex, the parent company of both entities, sought a 30-day extension to produce critical financial documents before the previously set deadline.
Ultimately, a settlement was reached, with Tether agreeing to pay an $18.5 million penalty and suspending trading activities in New York. Subsequently, media outlets and Coinbase invoked the Freedom of Information Act to request the NYAG’s public disclosure of Tether’s initial quarterly report. However, Tether opposed this request, citing the imperative to protect its customers’ confidential information from potential exploitation by malicious actors.
Despite Tether’s objection, the NYAG granted media outlets access to the documents, which unveiled the deactivation of several company accounts. This disclosure has sparked further discussion and analysis within the cryptocurrency community and beyond.
