Tether, the stablecoin issuer, has responded to the controversy surrounding the deactivation of accounts belonging to major cryptocurrency firms, including MoonPay. The New York Attorney General (NYAG) released documents stating that Tether deactivated approximately 29 accounts of prominent players in the crypto industry in 2021.
While the specific reasons for the terminations were not disclosed, Tether has stated that it will not comment on individual relationships. The company emphasized that all individuals had undergone thorough compliance checks during onboarding and continuous monitoring as part of Tether’s compliance policies.
Among the deactivated accounts were those of MoonPay, BlockFi, CMS Holdings, and Galois Capital. The NYAG investigation, which began earlier in 2021, revealed that certain documents related to the probe extended until around June of the same year. User codes within these documents have been redacted.
The investigation into Tether and its sister company Bitfinex was initiated by the NYAG, alleging misappropriation of $850 million in funds. During the investigation, iFinex, the parent company of both entities, requested a 30-day extension to produce critical financial documents.
Eventually, the parties involved reached a settlement, with Tether agreeing to pay an $18.5 million penalty and cease trading activities in New York.
Following the settlement, media outlets and Coinbase requested access to Tether’s initial quarterly report under the Freedom of Information Act. Tether, however, objected to the request, citing the need to protect customers’ confidential information from potential exploitation by malicious actors.
Despite Tether’s objection, the NYAG allowed media outlets access to the documents, revealing the deactivation of numerous company accounts. Tether’s response to the controversy highlights its commitment to compliance checks and emphasizes the rigorous processes involved in onboarding and ongoing monitoring. By addressing the concerns surrounding the account deactivations, Tether aims to maintain transparency while safeguarding the confidentiality of its customers’ information.
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