On Tuesday, a New York judge ordered Tether and Bitfinex to produce documents proving the USDT stablecoin’s backing.
Katherine Polk Failla, the United States District Court for the Southern District of New York’s judge, ordered Tether to demonstrate 1-to-1 backing of its eponymous stablecoin, USDT.
The company is required to provide the court with “general ledgers, balance sheets, income statements, cash-flow statements, and profit and loss statements,” among other documents.
The order is part of a three-year-old class action lawsuit filed by a group of investors against Tether Limited and its sister cryptocurrency exchange Bitfinex.
According to the lawsuit, the two companies used the USDT stablecoin to manipulate crypto markets and falsely represented USDT’s backing. Tether and Bitfinex have both denied the allegations.
Judge Polk Failla denied iFinex, Tether and Bitfinex’s parent company, request to stay the order, arguing that the company had already provided the documents required by the Commodity Futures Trading Commission and the New York Attorney General.
She determined that the Plaintiffs’ demand for unquestionably important documents is well-established because they appear to relate to one of the Plaintiffs’ core allegations.
Meanwhile, in a previous letter to the judge, the legal firm Debevoise & Plimpton, which represents Tether and Bitfinex, requested that the court deny the plaintiff’s request, claiming that the “plaintiffs failed to timely raise this dispute.”
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