Tether, the leading stablecoin in the cryptocurrency market, has faced criticism over the lack of transparency in its reserves. In 2021, CoinDesk, a media outlet, submitted a request for information on Tether’s reserves. Tether attempted to block the request, but a US judge has ruled that the attempt was unfounded.
The Information Request by CoinDesk
In 2021, CoinDesk submitted a request for information on Tether’s reserves based on the American Freedom of Information Law. Tether refused to share the requested documents with the journalists at CoinDesk and attempted to block the request. However, the US judge has ruled that the attempt to block the request was unjustified, which means that CoinDesk will receive the information on Tether’s reserves.
Implications for Tether
Although Tether still has the option to appeal the ruling, doing so could suggest that the company has something to hide. Tether is the largest stablecoin in the market, with a market cap of approximately $68 billion. The company reported a profit of $700 million in the last quarter of 2022, which was entirely added to the reserves that back the stablecoin. The company has been able to generate this profit by investing in high-yielding credit markets and US government bonds.