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Paolo Ardoino, the CTO of Tether (USDT), denied exposure to Signature Bank following reports about the firm using the now-defunct bank to gain access to the US banking system.
Earlier, Bloomberg reported that Tether instructed its clients to direct stablecoin-related payments to its Bahamas-based partner, Capital Union. The stablecoin issuer reportedly used Signet, Signature Bank’s digital payments platform, to facilitate these transactions.
The report also mentioned that Tether earlier tried to enter the financial system in the US in 2018. As per WSJ’s post, Signature Bank closed two accounts associated with Tether and crypto exchange Bitfinex.
AML expert Alma Angotti claimed that although the arrangement between Tether and Signature Bank cannot be considered illegal, the latter may have decided that it was less risky than opening an account for Tether.
In response, Paolo Ardoino tweeted that Tether does not hold any direct or indirect exposure to Signature Bank. The official statement issued by the stablecoin issuer added,
“Banks used by Tether always had access to several banking channels and counterparties.”
Meanwhile, Coinbase recently revealed that it possessed $240M worth of funds in Signature Bank. Moreover, Coinbase also disabled US Dollar (USD) transactions via Signet, noting that clients who use the payments network will not be able to deposit or withdraw their USD funds outside of banking hours.