Bitfinex CTO, Paolo Ardoino says SEC not after Tether

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Paolo Ardoino says that Tether has done little to merit further inquiries by the SEC.

Paolo Ardoino, Bitfinex’s vocal Chief Technical Officer, took Twitter this week to dispel worries that Tether could be the next priority for the U.S. Securities and Exchange Commission.

In response to a tweet from CryptoQuant CEO Ki Young Ju, Ardoino said that Tether adheres to the strict Know Your Customer/Anti-Money Laundering Regulations developed by the Treasury Department’s Financial Crimes Enforcement Network or FinCEN. In other words, people who say the Tether is less controlled are actually transmitting “FUD”—or anxiety, confusion, and doubt.

Ki Young’s original tweet says, “If SEC’s next target is Tether, it’s going to be very, very bad for this bull run, as this market relies heavily on $USDT.”

The comment by Ardoino:

While Ardoino is not wrong to point out Tether’s adherence to KYC/AML, it does not really answer Ki Young’s core concern that stablecoin might have skirted securities rules, particularly if its dollar reserves are compromised.

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In 2019, the New York Attorney General filed a memorandum of law charging that Tether and its sister firm, Bitfinex, were selling unregistered shares. The paper also alleges that the firms have lent USDT to borrowers, raising the suspicion that the coins are not completely backed by US dollar reserves as stated.

Tether’s USDT, which is currently only closely pegged to the US currency, has been at the forefront of debate for many years. In 2018, finance professor John Griffin and co-author Amin Shams claimed in a research paper that USDT was used to exploit the Bitcoin (BTC) price as it soared to $20,000.

In 2018, Tether and Bitfinex were asked by the Commodity Futures Trading Commission to seek confirmation that USDT is backed by comparable dollar reserves. Despite the accusations, no organisation was accused of any misconduct.

Many in the crypto world are waiting for the next domino to collapse after the SEC lodged a complaint against Ripple for supposedly operating an unauthorised securities offering. Ripple will get the opportunity to prove his point to the judge. In the meantime, it advises market investors not to draw any conclusions from the regulatory allegations.

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