• Wed. May 22nd, 2024

Tether Addresses Account Deactivation Concerns, Ramp Up Compliance Measures

Leon Kramer

ByLeon Kramer

Jun 17, 2023

start trading

The world’s largest stablecoin issuer, Tether, has responded to the ongoing controversy surrounding the termination of individual accounts. However, Tether did not reveal its reasons for deactivating the accounts of some prominent players in the crypto space.

Adhering To Compliance

As revealed by the New York Attorney General (NYAG), the USDT issuer deactivated nearly 29 accounts in 2021 belonging to notable figures within the cryptocurrency space. Each affected individual on the list had their accounts terminated by Tether for different reasons.

Although Tether refrained from disclosing the specific grounds for closing the said accounts, the company has responded by stating that it is not inclined to comment on individual transactions on its platform. However, Tether made it clear that every person involved had undergone thorough compliance checks during their onboarding process, and their accounts were subject to continuous monitoring, as stipulated by the firm’s compliance requirements.

Start Trading
Start Trading

BlockFi, Galois Capital, MoonPay, and CMS Holdings accounts were among the notable ones Tether deactivated. Despite the NYAG concluding its investigation in February 2021, new information indicates that certain documents relating to the probe extended beyond that timeframe until approximately June of the same year.

Notably, user codes contained within these documents were already redacted. During the investigation, the NYAG discovered that Tether and its sister company Bitfinex had allegedly misappropriated $850 million.

Coincidentally, iFinex, their parent company, formally requested a 30-day extension to submit crucial financial documents during this period. Following extensive negotiations, Tether settled with the NYAG, agreeing to an $18.5 million penalty payment and suspending its operations within New York.

Panic Over USDT’s Brief Depegging

Following Santiment’s announcement that USDT has briefly de-pegged from the dollar, the market recorded a surge in trading activities involving the USDT stablecoin. Santiment’s Realized Profit/Loss metric exhibited notable volatility for the stablecoin on the 15th of June, highlighting the high instability surrounding it.

The prevailing circumstances led to over $2 million in losses, signifying an upsurge in traders and holders divesting their tokens following the slight decline in the asset’s market value. However, the stablecoin has slightly recovered at the time of writing.

In the aftermath of the de-pegging incident, there was a noticeable drop in the supply of Tether on exchanges. The supply dwindled below 18.7%, a decline reminiscent of the dip in May 2020.

Based on the latest data available on CoinMarketCap, the dominance of USDT has remained the same following the de-pegging event. Currently, USDT maintains its position as the stablecoin with the highest market capitalization of over $83 billion.

In addition, USDT’s trading volume, within the last 24 hours, reached a substantial figure of over $21 billion, showcasing a notable lead over the second-ranked stablecoin, USDC. Comparatively, USDC recorded a trading volume of over $3 billion during the same period, highlighting the significant difference in activity between the two.

start trading

Leon Kramer

Leon Kramer

Leon Kramer, a renowned financial author, enlightens Main Forex News readers with his deep understanding of currency markets. His years in global finance, combined with an intuitive grasp of trends, delivers insightful, up-to-the-minute foreign exchange analysis.

Leave a Reply

Your email address will not be published. Required fields are marked *