The crypto world was abuzz on Tuesday as the New York Supreme Court ruled in favor of CoinDesk’s pursuit of Tether’s secret reserves. In a bizarre crypto cat-and-mouse chase that has dragged on for two years, CoinDesk finally gained the upper hand, forcing Tether to tell the public the truth.
Lack of Evidence: Justice Love’s Ruling Against Tether
Tether, the issuer of the world’s largest stablecoin by market capitalization, has been a popular topic of conversation for both skeptics and proponents of cryptocurrency. Questions about Tether’s reserves arose in 2019 when the New York Attorney General’s office reported an $850 million shortfall. Tether’s attempt to block CoinDesk’s FOIL request was rejected by a New York judge.
In June 2021, CoinDesk filed a FOIL request to the NYAG office for documents on Tether’s reserves. Tether strongly opposed the request, filing a petition to the New York Supreme Court to prevent document release. Justice Love ruled against Tether, stating a lack of evidence and absence of tangible proprietary items from petitioners.
Financial Disclosure Impact: Advancing Crypto Industry Transparency
CoinDesk published the long-awaited documents received from their FOIL request, shedding light on Tether’s financials. Tether’s disclosed documents revealed billions in commercial paper held in banks issued by global financial institutions. Additionally, its disclosure included information about their protocols with the New York State Attorney General’s Office, including KYC rules.
The company released a statement prior to CoinDesk publishing their findings but refused to answer further questions from the news outlet. Tether, a previously secretive cryptocurrency company, may have chosen to distance itself from CoinDesk after its financials were revealed.
CoinDesk’s persistent efforts to reveal Tether’s reserves have finally paid off after a long and challenging process. CoinDesk’s efforts and legal battle against Tether have shed light on the company’s financial situation. Increased transparency is a significant milestone for cryptocurrency adoption and will have a lasting industry impact.
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