Tether explains petition to bar CoinDesk from disclosing USDT reserve data

CoinDesk is not a party to Tether’s dispute with the New York Attorney General (NYAG) over USDT reserves, and the agreed terms of the case are not subject to revision. According to representatives of the stablecoin issuer.

Thus Tether responded to CoinDesk’s motion to intervene in the latest filing related to the FOIA case. The agency noted that the petition for appeal should be denied, as the public interest in the case outweighs commercial secrets.

Earlier, the stablecoin issuer petitioned for the protection of trade secrets and to bar disclosure of reserve data after CoinDesk’s formal joinder to the proceedings. This enabled the agency to present its own evidence and arguments.

In June 2021, CoinDesk submitted a request to the NYAG for any documents on USDT reserves. The agency received these data during the settlement of the case related to the company’s financial operations tied to the loss of $850 million. A NYAG official initially rejected the publication’s request, but CoinDesk gained access on appeal.

In its motion, Tether stressed that CoinDesk and the issuer Circle (USDC) share a common investor in Digital Currency Group. After this, the publication updated materials relating to the high-profile reserve process, disclosing information about DCG’s investments.

The new document again mentions the alleged conflict of interest.

“While CoinDesk informs the court that it adheres to strict journalistic ethics,” its own reports on the proceedings did not disclose to readers this blatant conflict of interest until Tether and others filed the complaint, the statement said.

According to the document, disclosure of reserve information would create an unfair competitive environment for the USDT issuer.

Tether also asserts that the power to resolve the conflict remains with the NYAG, since the settlement sets the terms of public disclosure.

The company argues that, since the NYAG initially rejected CoinDesk’s request, the process should not be subject to manipulation by the news agency.

The only real defendants here are those named in the petition. The court should ignore the label CoinDesk has assigned to itself, and must not allow the misleading \”labels\” of the publication to alter the clear procedural non-compliance with the agreement, which is the sole basis for granting the relief, the document explains.

In October 2021, the U.S. Commodity Futures Trading Commission ordered Tether and Bitfinex to pay civil penalties totaling $42.5 million.

In the same month, research firm Hindenburg Research questioned the reliability of the information about USDT reserves and offered a $1 million reward for the disclosure of previously unknown information about them.

The audit firm Moore Cayman confirmed that USDT is 100% backed by assets. However, the share of cash and bank deposits in the reserves was 10%, and 49% consisted of commercial securities.

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