Despite holding the designation of “largest stablecoin in the world,” Tether [USDT] keeps sinking in rough waters. A lawsuit was filed against the network for issuing USDT to boost the price of Bitcoin [BTC]. This market manipulation litigation, which has been ongoing for a while, has changed course. It wasn’t in the stablecoin’s favor this time.
It was revealed that a U.S. Judge in New York had denied Tether’s request to halt the disclosure of its financial documents. As a result, the network is now required to present a variety of documentation relating to USDT’s financial support. General ledgers, balance sheets, income statements, cash-flow statements, and profit and loss statements are all included in this list. Additionally, the stablecoin company must provide documentation of all cryptocurrency and stablecoin transfers. There were other requests for minor information like the transaction’s timing.
The Plaintiffs “plainly explain why they need this information: to assess the backing of USDT with US money,” according to the judge who presided over the case, Katherine Polk Failla. She went on to say,
“The documents sought in the transactions RFPs appear to go to one of the Plaintiffs’ core allegations: that the … Defendants engaged in crypto commodities transactions using unbacked USDT, and that those transactions “were strategically timed to inflate the market.”
It should also be mentioned that Tether was asked to provide information regarding the Bitfinex, Bittrex, and Poloniex accounts that are associated with it.
Tether in troubled waters
It appears that Tether simply doesn’t belong in New York. Following a legal battle between the platform and the New York Attorney General, Bitfinex and Tether agreed to a somewhat pricey $18.5 million settlement. The 22-month-long case, which began in April 2019, was eventually resolved.
The company further confirmed that it would stop providing trading services to New York citizens.
The platform will undoubtedly suffer from the most recent news. As was already mentioned, Tether’s lawyers claimed that providing financial documents was “very excessive” and “unduly burdensome.” However, the judge firmly refuted these claims and emphasized that these records were material to the dispute.