Tether to provide Bloomberg, CoinDesk insights into USDT reserves
Tether and its sister crypto exchange Bitfinex have decided to withdraw their opposition to a Freedom of Information Law (FOIL) request initiated by journalists, including Bloomberg Businessweek’s Zeke Faux.
In a corporate statement, the stablecoin issuer indicated that this decision aligns with its commitment to transparency, yet this will not result in the release of all their documents, citing standard business practices.
Tether and Bitfinex added that “Despite concerns that have arisen regarding the nature of the most recent NY FOIL request received by Tether and Bitfinex, particularly in light of certain behaviors exhibited by the journalists making that request, including Zeke Faux, Shane Shifflett, and Ada Hui, we want to make it clear that Tether and Bitfinex will not be further appealing this FOIL request. Our decision is rooted in our unwavering commitment to transparency and the belief that we have nothing to hide.”
These reasons were not plainly stated but at the same time, Tether accused Zeke Faux’s prior work related as occasionally ventured beyond the confines of traditional professional journalism. Furthermore, the statement cited instances of “biased and factually inaccurate reporting” from several media outlets, including the Wall Street Journal and Bloomberg, whose journalists are involved in this FOIL request.
This isn’t Tether’s first encounter with a FOIL request; they previously attempted to block a request by CoinDesk that sought documents about Tether’s reserves during an inquiry by the New York Attorney General (NYAG) into whether USDT was fully backed by reserves. After losing in court, Tether is not appealing the decision and, instead, accepted to engage with journalists and regulators “who meet ethical reporting standards and respect privacy.”
The backdrop to this development includes Tether’s settlement of $18.5 million with the NYAG over allegations of funds misappropriation and an injunction to halt trading activities in New York. This settlement also involved the public disclosure of their first quarterly report under FOIL, which Tether initially objected to in an effort to protect customer data from potential malicious exploitation.
The recent documents released by the NYAG revealed that Tether had deactivated several accounts belonging to prominent crypto players two years ago, each for varying reasons. These revelations were part of the fallout from the investigation into Tether and Bitfinex’s financial practices.
Tether’s response and the access request filed by media houses to scrutinize documents followed instances of de-pegging and questions about the stability and backing of stablecoins.