Court Asks Tether To Submit Memos Supporting Backing of USDT

Tether, publisher of the largest stablecoin in the digital asset industry is dealing with legal trouble these days. However, USDT is also losing its dominance to the USDC, Circle’s stablecoin. However, a U.S Judge has asked Tether to produce financial records.

Will Tether produce docs?

As per the order, Tether needs to produce crucial financial documents which depict its backing for USDT. The stablecoin firm has been alleged of issuing USDT as part of a campaign. Reportedly it was done to inflate the price of Bitcoin (BTC).

Meanwhile, it has also been asked to provide details regarding its accounts at Bittrex, Bitfinex, and Poloniex. The order states that USDT needs to register all transfer records of any digital assets or stablecoins. Tether will have to produce memos like general, ledgers, balance sheets, and other financial statements.

However, Tether attorney tried to block the order to release financial information calling it ‘overbroad in the extreme’. It mentioned that the Plaintiffs haven’t provided any basis for demanding such an unbounded production.

What do Plaintiffs want to prove?

Attorney added that it is a broad request and it is neither tailored to plaintiffs’ claims nor necessary for the production. Meanwhile, the Plaintiffs are attempting to justify their request by claiming it will help them to resolve certain matters.

The plaintiffs seek to resolve to what extent USDT was backed by US dollars. While they do not dispute that the Tether has already agreed to produce documents required to establish USDT reserves. While memos sufficient to prove the collateral or backing received for each issuance of the USDT will also be produced in the court.

Meanwhile, the global stablecoin market has also taken a huge hit due to the collapse of TerraClassicUSD. USDT is losing its dominance in the stablecoin market to USDC. Tether’s USDT is holding a market cap of over $67 billion while USDC holds $50 billion of market value.