Tether Responds to CoinDesk’s Intervention in Legal Proceedings
Attorneys for stablecoin issuer Tether and its parent company iFinex pushed back against CoinDesk joining a legal case between it and the New York Attorney General’s office (NYAG), saying, “the records at issue here include Bitfinex and Tether’s closely-guarded, non-public internal records that were developed at considerable expense and could not be acquired by its competitors other than through this FOIL request.”
With more than $78 billion worth of tokens circulating the market, Tether is by far the largest stablecoin issuer in the crypto markets and accounts for roughly half of all transactions against bitcoin on centralized exchanges, according to data from CryptoCompare.
The company settled a case with the NYAG for $18.5 million a year ago stemming from its part in its sister company Bitfinex’s attempts to cover up an $850 million hole after problems with its payment processor Crypto Capital Corp.
“Bitfinex and Tether recklessly and unlawfully covered-up massive financial losses to keep their scheme going and protect their bottom lines,” said Attorney General Letitia James in a release when the case was settled.
Besides paying a fine, Tether and Bitfinex are also required to submit quarterly statements showing the stablecoin issuer’s assets. After Tether submitted its balance sheet to the NYAG, CoinDesk made a Freedom of Information Law (FOIL) request for information about the reserves. That request was initially rejected but CoinDesk subsequently appealed; an appeals officer agreed and reversed the decision but Tether challenged the NYAG’s office in August, saying that releasing the details of its balance sheet would “would tilt the competing playing field against Tether.”
Tether, together with its parent company iFinex (which also owns cryptocurrency exchange Bitfinex), petitioned the New York State Supreme Court in August to block the NYAG from providing CoinDesk with documents detailing its reserves. CoinDesk became part of the case in January on the grounds that it had an interest in its outcome, and that the investing public does too.