Paolo Ardoino says Tether has done nothing to warrant an additional SEC investigation. – Relax, Tether will not be the SEC’s target – claims CTO Bitfinex.
Tether vs. SEC
Paolo Ardoino, CTO of Bitfinex, tweeted this week a post probably aiming to allay fears that Tether could be the next target after Ripple by the US Securities and Exchange Commission.
In response to a tweet from CryptoQuant CEO Ki Young Jun, Ardoino noted that Tether adheres to the strict Know Yor Customer / Anti-Money Laundering rules set by the Treasury Department’s Financial Crimes Enforcement Network (FinCEN). In other words, he suggested, the people who say Tether is less regulated are simply spreading “FUD” – that is, the fear, uncertainty and doubt that they scare investors with.
Ki Young suggested that “If the SEC’s next target is Tether, it will be very, very bad for bullish time as this market relies heavily on USDT.”
Ardoino’s answer was:
“Reminder: Tether is registered and regulated under FinCEN like all centralized competitors. Strict KYC / AML is applied to all direct users of Tether just as other major emitters do. (…) Ask yourself who benefits from spreading such disinformation? [dot. obaw, że SEC zajmie się Tetherem]”
While Ardoino is right in pointing to Tether’s KYC / AML adherence, it doesn’t really address Ki Young’s main concern that the stablecoin design could have circumvented securities laws, for example, especially if the company’s dollar reserves were left violated.
In 2019, the New York attorney general filed a legal memorandum in which he accused Tether and its sister company Bitfinex of creating an offer of unregistered securities. The document also alleges that the companies lent USDT to investors, raising the suspicion that the coins are not fully secured by US dollar reserves, both companies claim.
In turn, in 2018, Professor John Griffin and Amin Shams argued in their joint article that USDT was used to manipulate the Bitcoin (BTC) price, when it rose to as much as $ 20,000 in late 2017.
Tether and Bitfinex were called upon by the Commodity Futures Trading Commission in 2018 to provide evidence that USDT is backed by dollar reserves. Despite the charges, none of the companies were charged with any wrongdoing.