Tether and Bitfinex have reached an agreement to settle their dispute over a Freedom of Information Law (FOIL) request made by a group of journalists, including Zeke Faux from Bloomberg Businessweek. This move has been hailed by Tether as a significant step towards greater transparency in the cryptocurrency industry.
While Tether and Bitfinex have emphasized their commitment to transparency, they have clarified that it does not mean a complete release of all their documents. They have stated that a wholesale release of all their documents would not align with standard business practices. However, their decision to drop opposition to the FOIL request demonstrates a willingness to share information within certain boundaries.
Tether’s History with FOIL Requests
This is not the first time Tether has faced a FOIL request. In June 2021, CoinDesk filed a similar request regarding documents related to Tether’s reserves during the New York Attorney General’s inquiry. Tether tried to block the release of these documents but lost in court. CoinDesk joined the case in favor of the documents’ release, arguing that it was in the public interest. Tether opposed CoinDesk’s involvement, but a New York judge dismissed their opposition.
Tether and Bitfinex, in their recent statement, expressed their willingness to engage constructively with journalists and regulatory authorities who adhere to ethical reporting standards and respect data privacy boundaries. They stated, “We remain open to constructive engagement with journalists and regulatory authorities who adhere to ethical reporting standards and respect data privacy boundaries.”
Concerns and Controversies Surrounding Tether
Tether’s USDT is currently the largest stablecoin in the world, with a value of approximately $88.5 billion. It plays a crucial role in facilitating the movement of funds globally within the cryptocurrency ecosystem. However, there have been concerns raised regarding the use of USDT in illicit activities.
“Number Goes Up” by Zeke Faux highlights instances of USDT being involved in scams, including “pig butchering” scams.
It is important to note that Tether and the U.S. Department of Justice have recently announced the freezing of funds associated with such scams, indicating their commitment to addressing these issues.
Another area of controversy surrounding Tether is the backing of its stablecoin, USDT. While Tether claims that each USDT token is backed on a one-to-one basis by U.S. dollars held in reserve, questions about the extent of this backing have been raised.
There is a lack of transparent audits or regulatory oversight, which has fueled skepticism and accusations that Tether does not have sufficient reserves to fully back all the USDT in circulation.
