Judge Katherine Polk Failla of the Southern District of New York’s United States District Court compelled Tether to demonstrate the 1-to-1 support of its stablecoin, USDT.
The business must submit several records to the court, including “general ledgers, balance sheets, income statements, cash-flow statements, and profit and loss statements.”
The original claim by an investor group against iFinex, Tether and Bitfinex’s parent company, claimed that the company exploited the cryptocurrency market by disbursing unsubstantiated Tether with a specific intent to drive up the price of Bitcoin (BTC), among other cryptocurrencies.
The judge rejected iFinex’s pleas to halt the order on the basis that the corporation had already given enough documents to the New York Attorney General and the Commodity Futures Trading Commission (CFTC).
Since they seem to pertain to one of the Plaintiffs’ key complaints, she determined that the Plaintiffs’ request for unquestionably crucial documents is well-founded.
Last year, the judge dismissed the plaintiffs’ accusations of iFinex under the Racketeer Influenced and Corrupt Organizations Act, as well as allegations involving charges of racketeering or the use of said profits for investment purposes.
In a separate action concluded in February 2021 with the Office of the New York Attorney General, iFinex consented to cease serving customers in the state and pay $18.5 million in penalties to New York.
They also entered into an agreement to regular reporting of their reserves. The agreement was reached following a 22-month investigation to determine whether the corporation had attempted to conceal losses that were reportedly worth $850 million by exaggerating the amount of fiat collateral backing its USDT reserves.