In a surprising revelation from the New York Attorney General (NYAG), prominent cryptocurrency firm Tether recently suspended operations for 29 account holders. Among these accounts, key industry players such as crypto trader MoonPay, embattled lender BlockFi, investment company CMS Holdings, and the now-defunct hedge fund Galois Capital were found. This move has been seen as unusual as the reasons for these suspensions remain unspecified.
Everything You Need To Know About What We Shared With NYAG
— Tether (@Tether_to) June 16, 2023
Tether, in a cryptic response, refused to delve into specific details about any single account. It maintained that all account holders passed stringent compliance checks, both at the inception and throughout their ongoing association. The checks are part of Tether’s strict compliance policies, indicating the deactivated accounts had adhered to all necessary protocols at the time of their onboarding.
A Glimpse into the Tether-NYAG Legal Struggle
Previously, NYAG had investigated Tether and sister company Bitfinex over the alleged mishandling of $850 million. In response to the inquiry, parent company iFinex requested an extension to prepare crucial financial documentation. Subsequently, both parties settled the matter with an $18.5 million fine, accompanied by a ban on Tether’s trading activities in New York.
Later, media entities, including Coinbase, sought public access to Tether’s first quarterly report under the Freedom of Information Law (FOIL). However, Tether resisted this disclosure, citing customer data protection and the potential risk of misuse by harmful entities.
Commitment to Transparency
Despite Tether’s resistance, NYAG provided media outlets with the requested documents, affirming its dedication to transparency and openness. In doing so, it also unveiled the unexpected account deactivations. This step by NYAG has brought more scrutiny to Tether’s practices, raising more questions about its operations.
As this saga unfolds, the crypto industry and its observers will be closely watching Tether’s next moves, making the need for transparency and regulatory compliance more crucial than ever.