The company that issues USDT tokens has been in court since 2019, but it still has not provided the information required by the US authorities. The prosecutor said he would no longer tolerate delays. According to experts, there is a significant risk of a decline in the stablecoin rate
Tether and its stablecoin USDT are key players in the cryptocurrency market. The token rate is pegged to the US dollar, so traders often use it to wait out the fall in the price of bitcoin and other digital assets. Now USDT is ranked third in the ranking of digital assets by capitalization.
At the moment, proceedings are underway against Tether, as well as the Bitfinex exchange associated with it.
As Crypto-Auditor knows, in 2019, Bitfinex lost access to the funds of its clients in the amount of $ 1 billion. To continue functioning, the site took out a loan from Tether. Then the US authorities demanded documents from the firms on this transaction, but the companies did not provide the basic requested information, only formal data. This was stated by senior adviser to the US Attorney General John Castiglione and stressed that “delays must be stopped,” reports Coindesk.
“Seventeen months have passed since the application was submitted. During this time, the defendants submitted “jurisdictional” documents, but did not provide the basic information requested. Delays must be stopped and respondents must comply immediately,” said Castiglione.
He said that the documents must be provided within 60 days. Thereafter, New York State Supreme Court Justice Joel Cohen set a hearing for September 17th.
The USDT token rate must correspond to the dollar rate. Until 2019, this parity was achieved by matching the amount of USDT issued to the volume of US currency held in Tether accounts. The company then changed that rule, since then, Tether’s reserves can include traditional currency and cash equivalents, as well as other assets and forthcoming loan proceeds that were provided to third parties.
The fall of Tether will have a devastating effect on the entire cryptocurrency market, it will not die, of course, but it can sink a lot. Market players understand this and therefore are unlikely to allow a strong fall in USDT. That is, there may be a fall, but no one in the market needs it. But I don’t think this will be possible anytime soon. It is possible to store in USDT, but like any centralized and privately-issued asset, Tether has risks.