The deadline for Tether to submit the documents requested by the New York Prosecutor’s Office expires on January 15th, 2021.
There is concern within the crypto world about this deadline, although it is probably an exaggerated fear.
In fact, the main worry is that evidence will come to light that Tether created large amounts of USDT out of thin air.
The New York Attorney General (NYAG) is accusing Tether of violating regulations relating to, for example, providing unauthorized services to US customers or harming investors.
Thus, the NYAG’s ongoing lawsuit against iFinex, the holding company that owns Tether, is not expected to address the issue of market manipulation.
Furthermore, these allegations of Bitcoin price manipulation are now obsolete, in the sense that the original academic report that started the attempt to prove them is no longer considered particularly reliable by many.
In other words, contrary to what is often claimed by the many rumours circulating about it, to date there is no formal lawsuit before a judge accusing Tether of manipulating the market.
However, doubts remain as to whether all USDT created by Tether are collateralized. The company claims that they are 100% collateralized, largely backed by US dollars, with about a quarter backed by other assets.
At the same time, Tether is under indictment for other issues, and given that the stablecoin issued by Tether is the leading one in the world, with daily trading volumes exceeding even those of Bitcoin, users are quite concerned.
What will happen to Tether on January 15
Lastly, it is necessary to point out that the January 15 deadline only provides for the delivery of the required documentation to iFinex and therefore does not provide for any ruling. Hence, this is a purely technical deadline, which is not likely to result in any judicial outcome in the short term, unless it is not met.
To explain this scenario in more detail, the CTO of Tether, Paolo Ardoino, and the General Counsel of iFinex, Stuart Hoegner, answered numerous questions during a podcast with Peter McCormack held yesterday.
Ardoino commented by saying:
“- Tether is backed
– Working towards increased transparency in 2021, stay tuned!
– Strong KYC/AML
– Weekend purchases explained
– After 15th Jan, business as usual”.