Stablecoin issuer Tether deactivated accounts of multiple well-known crypto companies by 2021, according to documents released this week by the New York Attorney General relating to a legal settlement.
The list of deactivated accounts includes crypto trading platform MoonPay, crypto lending firm BlockFi, crypto investment firm CMS Holdings and crypto hedge fund Galois Capital. BlockFi is currently going through bankruptcy proceedings, while Galois Capital is closed.
The list includes companies and individuals who have been laid off for various reasons, a source with knowledge of the matter said. While the NYAG investigation concluded in February 2021, some documents are dated to June 2021.
“We do not wish to comment on any individual relationship, but each has passed the strict onboarding compliance checks and ongoing monitoring required by Tether’s compliance policies,” Tether said in a statement. rack earlier today.
BK Offshore Fund was also on the list of deactivated accounts. In February 2023, it was sued by the U.S. Securities and Exchange Commission over allegations that it was a fraudulent scheme, mixing investor funds and making $3.6 million in Ponzi-style payments to investors before collapsing in 2022.
The list of deactivated accounts contains a total of 29 accounts that have been deactivated. User codes for each account have been redacted and the list contains no other information.
NYAG’s investigation into Tether
The documents were collected by NYAG during its investigation into Tether, resulting in a February 2021 settlement and a $18.5 million fine. They were released following a freedom of information request from crypto publication CoinDesk, and the Attorney General’s Office made them available to The Block.
The documents provide more information about Tether’s banking institutions, bitcoin lending, and information about trading paper holdings at the time. The documents also show that Tether partially backed its stablecoin with Chinese commercial paper, something the company did not publicly acknowledge at the time — despite strong rumors and Article suggest that it was. The company no longer has any commercial paper backing its stablecoin.
Tether initially opposed the NYAG’s release of these documents, but dropped its opposition.
“After fiercely defending this, Tether dropped its opposition, allowing CoinDesk and other media outlets to access these documents to prove its commitment to transparency and openness about further, unproductive US litigation,” the company said.
The Block has reached out to each named company for comment. It’s unclear if any of the companies have other accounts with Tether or have since created new accounts.
© 2023 The Block Crypto, Inc. All rights reserved. This article is for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial or other advice.
