Tether, the stablecoin that recently claimed to be setting a new standard for transparency, has filed an urgent petition with the New York Supreme Court to block the publication of certain documents arising from the New York Attorney General’s (NYAG) investigation against Tether surrender and its parent company Bitfinex.
Apparently, in late June, the Attorney General received a request on the Freedom of Information Act (FOIL) requesting material related to the NYAG-Tether / Bitfinex settlement agreement.
The company had apparently objected to the motion on the grounds that disclosing Bitfinex and Tether’s banking and lending practices would put Bitfinex and Tether at a competitive disadvantage, provide a blueprint for potential villains to damage their reputation and thus their competitive advantage, and that the disclosure customer names and account information would constitute an unjustified invasion of privacy. She wanted certain requested documents to be redacted and others to be withheld entirely.
While the secretary responsible for monitoring these inquiries initially approved the objections of Tether and Bitfinex, they were rejected on appeal. It is this appeal that the company overturned by the Supreme Court in accordance with the provisions of the Freedom of Information Act that allow for judicial review of FOIL decisions.
Given Tether’s constant assurances of transparency and false assurances that NYAG has “found no wrongdoing,” this insane attempt to keep the results of the investigation under wraps is comical. But the tray also contains other interesting gemstones. For example, Tether has to admit that it considers the disclosures it is required to make quarterly to NYAG for two years under the Settlement Agreement as being made to NYAG only. This is important: Do you remember the much criticized Consolidated Reserves Report that Tether published, supposedly to meet the requirements of the Settlement Agreement? Tether has now confirmed that whatever it was showing NYAG is a completely different document. This was predictable because it was difficult to imagine that NYAG would accept such a sparse and detailed document as a satisfactory disclosure under the settlement agreement. It is a reminder, however, that Tether has no interest in showing the public any of his cards, and certainly not one that relates to the true status of his reserve.
Meanwhile, Tether released a public statement on the filing stating, “Tether continues to lead the industry in providing information about its reserves to create clarity and transparency in our operations. Tether is also in the process of receiving audited financial statements and hopes to be able to present them in the coming months. “
Given that Tether has already lied about the NYAG investigation result and managed to go without a single exam for over seven years, don’t hold your breath for Tether to change without enforcement.
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