Tether and Bitfinex Drop Opposition to FOIL Request by Journalists

In a move towards greater transparency, Tether and Bitfinex have announced that they will no longer oppose a Freedom of Information Law (FOIL) request by journalists, including Bloomberg Businessweek’s Zeke Faux. This decision comes after Tether previously faced legal challenges when attempting to block a FOIL request in 2021. While the companies emphasize that the drop in opposition does not mean a complete release of all documents, it signifies their commitment to engaging with journalists and regulatory authorities who adhere to ethical reporting standards and respect data privacy boundaries. As the world’s largest stablecoin, worth approximately $88.5 billion, Tether’s actions have far-reaching implications for the crypto ecosystem.

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Stablecoin issuer Tether and Bitfinex agree to drop opposition to FOIL request

Stablecoin issuer Tether and its sister company Bitfinex have announced that they will no longer oppose a Freedom of Information Law (FOIL) request filed by a group of journalists. This includes Bloomberg Businessweek’s Zeke Faux, who authored the book “Number Goes Up.” The move is seen as a commitment to transparency, although it does not mean that all documents will be released. Tether and Bitfinex clarified that transparency does not equal a wholesale release of all their documents, as it goes against standard business practices.

This is not the first time that Tether has made such an announcement. They previously dropped their opposition to a FOIL request filed by CoinDesk after losing in court twice. The request was related to documents produced during the New York Attorney General’s inquiry into allegations that Tether’s USDT stablecoin was not adequately backed by reserves. Tether settled with the Attorney General’s office at the end of the investigation.

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FOIL request by CoinDesk

CoinDesk’s FOIL request specifically asked for documents related to Tether’s reserves. Tether had petitioned the New York Supreme Court to block the release of these documents, but CoinDesk intervened in the case to argue for their release in the public interest. Tether opposed CoinDesk’s involvement, but the judge dismissed their opposition.

Tether’s reserves and importance

The request for Tether’s reserves is significant as USDT is currently the world’s largest stablecoin, with a value of around $88.5 billion. The stablecoin plays a crucial role in the crypto ecosystem by facilitating the movement of money globally. Therefore, the transparency and adequacy of Tether’s reserves are of great importance to the stability and trustworthiness of the entire ecosystem.

Opposition to CoinDesk’s involvement

Tether initially opposed CoinDesk’s involvement in the FOIL request, but this opposition was dismissed by the judge. The companies, however, have stated that they are open to constructive engagement with journalists and regulatory authorities who adhere to ethical reporting standards and respect data privacy boundaries.

Open to constructive engagement with journalists and regulatory authorities

Tether and Bitfinex have expressed their willingness to engage constructively with journalists and regulatory authorities. They emphasize the importance of adhering to ethical reporting standards and respecting data privacy boundaries. This suggests a commitment to ensuring transparency and accountability in their operations.

USDT as the world’s largest stablecoin

USDT, the stablecoin issued by Tether, holds the position of the world’s largest stablecoin. With a market capitalization of approximately $88.5 billion, USDT plays a crucial role in facilitating the movement of funds within the crypto ecosystem. Its widespread use and acceptance have made it an essential part of the digital currency landscape.

Use of USDT in illicit activities

The use of USDT in illicit activities has been a point of concern for regulators and market participants. The book “Number Goes Up” by Zeke Faux highlights various instances of USDT being used in illicit activities, including scams. To address these concerns, Tether and the U.S. Department of Justice recently froze funds tied to these scams. Ensuring the integrity and legitimacy of USDT transactions is crucial for maintaining trust in the stablecoin and the broader crypto ecosystem.

Background on Tether and Bitfinex

Tether is a stablecoin issuer that operates as a sister company to cryptocurrency exchange Bitfinex. Tether issues the USDT stablecoin, which is designed to maintain a one-to-one peg with the U.S. dollar. Bitfinex, on the other hand, is a popular platform for trading cryptocurrencies. The two entities are closely linked, and any developments or controversies surrounding Tether often involve Bitfinex as well.

Transparency statement

Tether and Bitfinex have made a commitment to transparency in their operations. While dropping their opposition to the FOIL request, they have clarified that transparency does not mean a wholesale release of all their documents. This approach is considered in line with standard business practices.

Previous court cases

Tether and Bitfinex have faced legal challenges in the past. They previously lost in court twice when opposing a FOIL request filed by CoinDesk. These court cases highlight the importance of transparency and accountability in the operations of stablecoin issuers, especially for those with a significant market presence like Tether.

Importance of Tether’s reserves

Tether’s reserves are of critical importance to the stability and trustworthiness of the USDT stablecoin. The reserves are meant to provide adequate backing for the value of USDT, ensuring that it remains pegged to the U.S. dollar. The transparency and sufficiency of Tether’s reserves are therefore essential for maintaining confidence in the stablecoin and avoiding potential disruptions in the broader crypto ecosystem.

Appeal against FOIL request

Tether and Bitfinex have announced that they will not appeal against the FOIL request filed by the group of journalists. This decision indicates a willingness to cooperate and engage in a transparent manner with the requesters, rather than dragging the legal process further.

Constructive engagement with journalists and regulators

In their statement, Tether and Bitfinex express their openness to constructive engagement with journalists and regulatory authorities. This commitment suggests a willingness to address concerns, provide information, and ensure that their operations are in line with regulatory requirements and ethical reporting standards.

USDT’s role in the crypto ecosystem

USDT plays a crucial role in the broader crypto ecosystem. As the world’s largest stablecoin, it facilitates the movement of funds within the digital currency landscape. USDT is widely used by cryptocurrency traders and investors as a means of transferring value and mitigating price volatility. Its popularity and acceptance reflect its importance as a financial instrument in the crypto space.

Use of USDT in illicit activities

The use of USDT in illicit activities, as highlighted in the book “Number Goes Up,” is a concern for regulators and the crypto community. Tether’s recent action of freezing funds linked to these activities demonstrates a commitment to addressing these concerns. Ensuring the integrity and legitimacy of USDT transactions is crucial for maintaining trust in the stablecoin and preventing misuse within the crypto ecosystem.

In conclusion, Tether and Bitfinex’s decision to drop opposition to the FOIL request indicates their commitment to transparency. While not releasing all documents, they are open to constructive engagement with journalists and regulatory authorities. The importance of Tether’s reserves and its role as the world’s largest stablecoin cannot be understated. Addressing concerns about USDT’s use in illicit activities is crucial for maintaining trust in the stablecoin and the broader crypto ecosystem. Overall, this announcement highlights the ongoing effort towards greater transparency and accountability within the crypto industry.

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