Katherine Polk Failla, who serves as a judge in the U.S. District Court for the Southern District of New York, recently ordered the parent company of Tether (USDT) to provide financial records of the USDT stablecoin in the court as a part of the proceedings. The legal case does not directly concern Tether but its parent company.
What Is USDT Stablecoin?
Before jumping into the intricacies of legal proceedings we have been mentioning, let’s check what is USDT stablecoin all about. The USDT CoinMarketCap page defines it as:
“USDT is a stablecoin (stable-value cryptocurrency) that mirrors the price of the U.S. dollar, issued by a Hong Kong-based company Tether. The token’s peg to the USD is achieved via maintaining a sum of commercial paper, fiduciary deposits, cash, reserve repo notes, and treasury bills in reserves that are equal in USD value to the number of USDT in circulation.
Originally launched in July 2014 as Realcoin, a second-layer cryptocurrency token built on top of Bitcoin’s blockchain through the use of the Omni platform, it was later renamed to USTether, and then, finally, USDT. In addition to Bitcoin, USDT was later updated to work on the Ethereum, EOS, Tron, Algorand, and OMG blockchains.”
iFinex Legal Case
A group of investors recently filed a complaint against iFinex, which is the company behind both USDT stablecoin and Bitfinex, a popular crypto exchange. The people who complained alleged that the company issued them USDT that was not backed by the U.S. dollar. This was done with the aim of pushing the crypto market up, which would benefit a host of different currencies. However, this can ideally be considered as an act of manipulating the market trends, which is completely unethical.
According to a court filing, the U.S. Judge, Failla, decided to accept the plea of these complainants and passed an order which made it obligatory for iFinex to submit:
“Any and all general ledgers, balance sheets, income statements, cash-flow statements, and profit and loss statements.”
The order for iFinex lawsuit also noted that the:
“Court finds that Plaintiffs’ financial records RFPs are not overly broad, particularly given that Defendants have had opportunities to make sample productions of the financial records RFPs, but have failed to do so despite Plaintiffs’ agreement to such proposal.”
However, currently, any of the accusations mentioned in the iFinex lawsuit is not proven. This is why it is a crucial decision to wait for. Moreover, it might have a long-lasting effect on the USDT stablecoin.
USDT Price Today
The aforementioned update obviously didn’t have any effect on the USDT price as it is pegged to the U.S. dollar and is always priced at or near $1. According to the data by the USDT CoinMarketCap page, the coin traded at $1.00 representing no change at the time of writing on September 22, 2022.
The market capitalization of the crypto was $67.97 billion, up by 0.02%. However, the 24-hour trade volume skyrocketed by a huge 42.00% and was at $68.11 billion. As it is backed by the dollar any slight change in the price is extremely notable. This is why the 1-day chart for this crypto shows the repetitive steep rises and falls.