Singapore-based DeFi protocol Cake said that Tether would stop converting the stablecoin into US dollars due to “changes to its rules”. This was disclosed by the platform’s co-founder and CEO, Julian Hosp.
Ok, so, I won’t be able to tell you if redeeming $USDT into $USD is actually possible, due to being in #Singapore, which was a recent change to the @Tether_to ToS from one day to another. Interesting. pic.twitter.com/1YzNqkbjMO
— Dr. Julian Hosp (@julianhosp) September 25, 2023
The executive provided a screenshot of a message from Tether. It states that the new terms of service envisage a refusal to serve “corporations controlled by another organisation, directors and shareholders registered in Singapore”.
Users noted that Tether’s actions were driven by a recent scandal in the jurisdiction. Local police conducted an investigation and found laundering of funds tied to digital assets totaling more than $2 billion.
?? ? 1 month after the massive money laundering bust in Singapore, Tether restricts customers in Singapore
Crypto firms have flocked to SG recently for friendlier regs. This could be a huge blow
W/ the HKG crackdown, the gates to Asia are closing for the crypto cartel https://t.co/yVu79bJHgb
— Rho Rider (@RhoRider) September 25, 2023
There were also more optimistic users who suggested that Cake’s problems are idiosyncratic and do not affect other Singapore-linked crypto startups.
This could be a @cakedefi issue specifically. It’s flagged as EDD — enhanced DD. I’m not suggesting anything is wrong at Cake, just that it could be specific tether / cake relationship issues.
— Hayden (@hayden_9776) September 25, 2023
Earlier in September, Singapore authorities froze $1.8 billion tied to money-laundering involving cryptocurrencies. In the local parliament, more than 30 questions were raised on this topic: from the stringency of vetting processes to reports of suspicious transactions and the impact on the country’s reputation.