- Tether expects “meritless and mercenary” lawsuits based on an unnamed study claiming that (USDT) issues of tether are responsible for the manipulation of the cryptocurrency market.
- Meanwhile, the New York prosecution’s case against Tether and iFinex remains open. An important deadline expires next week.
The company behind the Stablecoin Tether (USDT) yesterday published a press release on its website describing that Tether expects a “worthless and mercenary” lawsuit. The indictment is based on an unnamed study that has not yet been released (at the time of publication) and falsely claims that Tether (USDT) emissions are responsible for manipulating the cryptocurrency market.
Although Tether has not provided any information as to which study it is. However, there is some speculation that this may be the Token Analyst study. As CNF reported on Friday, Token Analyst found that Tether had made a significant contribution to the Bitcoin Rally in 2019. According to the study, the Bitcoin price rose on days when USDT ERC20 was printed in 19 of 27 days (70 percent) and on 12 of 24 days (50 percent) at USDT Omni.
Whatever the study, Tether vehemently contests the results and conclusions and states in the press release that the results are based on erroneous assumptions, incomplete data and erroneous methodologies. Tether believes that “mercenary attorneys use this deeply flawed paper to persuade plaintiffs to file opportunistic lawsuits, which may have been the true motive” of the study:
In advance of any filing, we want to make clear our position that any claims based on these insinuations are meritless, reckless and a shameless attempt at a money grab. Accordingly, Tether will vigorously defend itself in any such action.
These baseless accusations are an attempt to undermine the growth and success of the entire digital token community, of which Tether is a key part.
Tether has stated on several occasions in the past that its business model is to accept funds from institutional investors in order to coin a corresponding number of USDT which are then issued to them.
NYAG proceedings still open
In spite of this “clean” business model, the New York Attorney General’s Office (NYAG) is currently pending proceedings against Bitfinex and Tether. In April, the New York Attorney General’s Office initiated proceedings against Tether and its parent company iFinex because the Bitfinex cryptocurrency exchange lost 850 million euros and subsequently used Tether’s funds to cover up the shortfall.
Following the initiation of the proceedings, Tether announced for the first time that all USDT coins are only 74 percent covered by US dollars and that further assets will be used to fully cover the deficit. Tether also confirmed this in yesterday’s press release:
All Tether tokens are fully backed by reserves and are issued pursuant to market demand, and not for the purpose of controlling the pricing of crypto assets.
Currently, Tether and iFinex must submit the documents relevant for the investigation to the New York public prosecutor’s office by October 14. However, the investigation is not about the way USDT is printed, but only about Tether’s solvency. Currently, Tether has still not handed over any documents. But maybe next week there will be more movement in the case when the NYAG deadline expires.