Following the massive legal showdown about to take place between SEC and Ripple, there have been rumors that the Tether stablecoin may be the next in line.
However, Bitfinex’s chief technology officer Paolo Ardoino has come out to calm things down, assuring users that Tether will not be put into such scrutiny.
A properly registered stablecoin
Ardoino stated on Twitter that Tether is a properly registered stablecoin with FinCEN, and was indeed well regulated. He also pointed out that Tether’s market capitalization recently hit $21 billion while saying those spreading the rumors don’t mean well for the stablecoin.
Tether said the rumor is passed by competitors of the stablecoin who want to play the regulation card to gain favor with users. Ardiono also confirmed that the USDT token has a reserve backing that’s equal to 100% of the outstanding coins.
The current regulatory troubles Ripple’s XRP is facing has alerted the market, with more interest and observation on several other tokens.
Ardoino was also replying to Ki Young Ju, the chief executive officer of Cryptoquant, dismissing any rumors and accusing him of spreading false information to gain users from competitors. Ardiono also revealed that the company’s stablecoin has been adhering to all the rules of the regulation, and XRP’s case cannot befall USDT.
Tether also facing legal issues
However, it seems the rumors are not just based on unfounded evidence. While XRP is currently facing the heat for its alleged unauthorized token sale, Bitfinex is also facing its own legal troubles. US regulators have accused Bitfinex and its associated token of covering up an $850 million loss using $700 million from the stablecoin’s reserve.
However, the company refuted the claims and defended itself, explaining that the said amount was kept with Crypto Capital, a Panama-based company. Bitfinex said it was not the fault of the company that the money was seized as a safeguard by different jurisdictions, including the United States, the UK, Portugal, and Poland.
The case against Tether could affect other stablecoins
In the latest development, the company failed to prevent the court from demanding legal documents about the settlement.
Although the case with XRP has not been decided yet, observers and members of the crypto community fear that such an incident with Tether could be a heavy blow to other stablecoins as well. Stablecoins such as Gemini Dollar, Paxos Standard, and Circle’s coin could be affected.