Tether, the leading stablecoin issuer, responds to the account deactivation controversy that involved major crypto firms, including MoonPay. In response to these claims, Tether has emphasized its commitment to compliance checks and has refrained from commenting on individual relationships.

Rigorous Compliance Checks During Onboarding and Ongoing Monitoring

Tether has made it clear that all individuals associated with the deactivated accounts underwent thorough compliance checks during the onboarding process. These checks are in accordance with Tether’s compliance policies, which prioritize adherence to regulatory standards. Furthermore, ongoing monitoring ensures that compliance remains a top priority for the company.

Among the deactivated accounts were well-known cryptocurrency players such as MoonPay, BlockFi, CMS Holdings, and Galois Capital. While the specific reasons for the termination of these accounts have not been disclosed, it is evident that Tether implemented the necessary measures to ensure compliance within its operations.

The NYAG Investigation and Its Extended Timeline

The New York Attorney General (NYAG) conducted an investigation into Tether and its sister company Bitfinex. This investigation focused on the alleged misappropriation of $850 million in funds and was concluded in February 2021. However, recently discovered documents indicate that it extended until around June of the same year. The NYAG redacted user codes within these documents to protect sensitive information.

The NYAG Investigates Tether

Settlement and Penalty Imposed on Tether

Ultimately, a settlement was reached between Tether, Bitfinex, and the NYAG. Tether agreed to pay a penalty of $18.5 million and cease trading activities in New York. This resolution aimed to address the concerns raised during the investigation and ensure compliance with regulatory requirements.

Tether’s Opposition to Public Disclosure

Following the settlement, media outlets and Coinbase submitted requests to the NYAG under the Freedom of Information Act. These requests seek public disclosure of Tether’s initial quarterly report. 

However, Tether objected to this request, citing the need to safeguard its customers’ confidential information against potential exploitation by malicious individuals. Despite this objection, the NYAG allowed media outlets access to the documents. This brought to light the deactivation of multiple company accounts.

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