Tether and Bitfinex Settle Dispute, Will Share Information Under FOIL Request

Tether and Bitfinex Settle Dispute, Will Share Information Under FOIL Request

Tether and Bitfinex have reached an agreement to settle their dispute over a Freedom of Information Law (FOIL) request that was filed by a group of journalists, including Zeke Faux from Bloomberg Businessweek. The companies have described this resolution as a positive step towards greater transparency within the cryptocurrency industry. However, it’s important to note that this does not entail a complete release of all their documents, as both Tether and Bitfinex have stated that such a wholesale release would not align with standard business practices. Nevertheless, their decision to drop their opposition to the FOIL request signals their willingness to share information within certain boundaries.

Tether has encountered FOIL requests before.In June 2021, CoinDesk submitted a similar request for documents related to Tether’s reserves during an inquiry by the New York Attorney General. Tether initially attempted to block the release of these documents but lost the legal battle. CoinDesk actively supported the case, advocating for the release of documents and asserting that it was in the public interest. Despite Tether opposing CoinDesk’s involvement, a New York judge dismissed their opposition.

In a recent statement, Tether and Bitfinex conveyed their willingness to engage constructively with journalists and regulatory authorities, provided they adhere to ethical reporting standards and respect data privacy boundaries. The companies underscored their openness to constructive engagement with those who uphold these principles.

The Controversy Surrounding USDT

Tether’s USDT is currently the world’s largest stablecoin, with a total value of approximately $88.5 billion. It plays a crucial role in the cryptocurrency ecosystem by enabling the global movement of funds. However, concerns have arisen regarding the use of USDT in illicit activities. Zeke Faux, in his book titled “Number Goes Up,” highlighted instances of USDT being involved in scams, including “pig butchering” scams.It’s notable that Tether and the U.S. Department of Justice have announced the freezing of funds linked to scams. Additionally, controversy surrounds the backing of Tether’s USDT stablecoin. USDT is a type of stablecoin pegged to the value of the U.S. dollar, aiming to provide stability in the volatile world of cryptocurrencies. Nevertheless, questions have emerged about the extent to which USDT is genuinely backed by reserves.Tether has claimed that each USDT token is backed on a one-to-one basis by U.S. dollars. dollars held in reserve. However, the lack of a transparent audit or regulatory oversight has led to skepticism and accusations that Tether may not have sufficient reserves to fully back all the USDT tokens in circulation.

FAQ’s:

What is the Freedom of Information Law (FOIL) request mentioned in the article?

The FOIL request is a legal mechanism that allows individuals or organizations to request access to government or, in this case, corporate documents that are considered to be of public interest.

Why did Tether and Bitfinex decide to settle their dispute over the FOIL request?

Tether and Bitfinex settled to demonstrate their commitment to transparency in the cryptocurrency industry, even though they did not release all documents, citing standard business practices.

What is the role of Tether’s USDT stablecoin in the cryptocurrency ecosystem?

USDT is the largest stablecoin globally and facilitates the global movement of funds within the cryptocurrency space.

Why have concerns been growned about the use of USDT in illicit activitie?

There have been instances where USDT has been associated with scams and fraudulent activities, leading to concerns about its use in illicit transactions.

What is the controversy surrounding the backing of Tether’s USDT stablecoin?

Questions have arisen about whether Tether has sufficient reserves to fully back all the USDT tokens in circulation, as there is no transparent audit or regulatory oversight to verify this claim.

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About Victor Dsouza

Victor Dsouza is Crypto Journalist. He is keen to write about crypto tokens, crypto presale, you can follow him on twitter and LinkedIn.

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