Tether will not be targeted by the SEC, assures Bitfinex CTO
Paolo Ardoino, CTO of Bitfinex: USDT is not less regulated than its competitors, claiming otherwise is just FUD
Paolo Ardoino, the outspoken Chief Technology Officer of Bitfinex, has allayed traders‘ concerns about Tether becoming the next target of the US Securities and Exchange Commission.
Responding to a tweet from Ki Young Ju, CEO of CryptoQuant, Ardoino said that Tether adheres to the stricter US Know Your Customer and Anti-Money Laundering regulations set by Treasury Bitcoin Code Department’s Financial Crimes Enforcement Network (FinCEN). In other words, the rumours that Tether is ‚less regulated‘ than its competitors is just FUD.
In his tweet, Ki Young had stated:
„If the SEC’s next target is Tether, it would be an extremely negative development for this bull run, as the market is heavily dependent on USDT.“
Ardoino then responded:
„I would like to mention that Tether is registered and regulated with FinCEN, just like all its centralised competitors. Strict KYC and AML processes are applied to all direct users of Tether, just as other major issuers do. To say it is ‚less regulated‘ is just FUD. Ask yourself this question: who would benefit from spreading such misinformation?“
Reminder: #Tether is registered and regulated under FinCEN as all the centralised competitors. Strict KYC/AML is applied to all Tether direct users, as the other main issuers are doing. Less regulated is just FUD. Ask yourself who benefits from spreading such misinformation? https://t.co/0izlgpJ75r
– Paolo Ardoino (@paoloardoino) December 30, 2020
However, Ardoino’s response does not address the concerns highlighted by Ki Young: stablecoin may indeed have circumvented security laws, especially if its dollar reserves are truly compromised.
General charged Tether and its subsidiary Bitfinex
In 2019, the New York Attorney General charged Tether and its subsidiary Bitfinex with conducting an unregistered securities offering. The document claims that the company allegedly lent USDT to investors, raising suspicions that the digital coins are not fully backed by US dollar reserves, as the company claims.
For several years now, the USDT stablecoin, which appears to be only roughly pegged to the US dollar, has been at the centre of numerous controversies. In 2018, researchers John Griffin and Amin Shams accused Tether of using its stablecoin to manipulate the Bitcoin (BTC) market, sending its price soaring to $20,000 in late 2017.
Both Tether and Bitfinex were sued by the Commodity Futures Trading Commission, to prove that USDT was indeed backed by an equivalent amount of US dollars. Despite numerous allegations, to date no one has yet been able to prove any wrongdoing.
In the meantime, the crypto community is awaiting the outcome of the SEC’s lawsuit against Ripple, which is accused of conducting an unauthorised securities offering. However, the San Francisco-based company has urged market participants not to draw any hasty conclusions from the lawsuit.