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World’s largest stablecoin operator Tether Limited has petitioned the courts not to accede to CoinDesk’s request in a filing.
Tether Slams The Door On CoinDesk
Earlier this week, the popular stablecoin company asked a New York judge to block disclosure efforts from the industry news outlet. According to official documents, Tether Limited - as well as its sister company; crypto exchange Bitfinex - filed to block the New York Attorney General (NYAG) from disclosing information about USDT’s reserve breakdown to crypto-focused news agency CoinDesk. The reports confirmed that CoinDesk had filed a Freedom of Information Law (FOIL) request with the NYAG, asking for information about USDT’s asset reserves. Tether Limited and Bitfinex had submitted the documents to the NYAG earlier this year in a settlement of a two-year case over whether the two companies had commingled funds to cover up fraud. As CoinDesk reported, Tether’s lawyers had initially asked the FOIL officer at the NYAG’s office to deny the request. After the FOIL officer obliged, CoinDesk appealed the decision. The appeal was successful, with the appeals officer eventually gaining access to the documents. Now, Tether is going on the offensive once more, requesting that a judge blocks access to the documents. Tether is arguing that disclosure of USDT’s banking reserves will affect the asset’s competitive edge as the most popular stablecoin. “Bitfinex and Tether differentiate themselves from their competitors using at least three secret and competitively sensitive types of data that are at issue in this proceeding: (1) financial strategies, (2) compliance measures and documentation and (3) customer data,” the company explained in its motion. It also added that disclosure will “tilt” the playing field against its stablecoin. The stablecoin operator added that it has so far spent a great deal of time and effort to build its banking relationships. Disclosure would jeopardize this - and, by extension, the company’s business model.
The Pressure Mounts on Tether
Tether has so far faced significant questions about USDT and its backing. Things have been especially difficult as Coinbase and Circle - the operators of its biggest rival; USDC - have committed to being more transparent in their operations. The stablecoin operator has so far made efforts to be more transparent as well, especially following its settlement with the NYAG earlier this year. It released its Consolidated Reserves Report (CRR) last month, showing $62.77 billion in consolidated assets for the period ended June 30. The company also revealed $62.62 billion in consolidated liabilities, of which $62.61 billion were related to USDT.