• Tether has come out to address concerns raised about several accounts deactivation in 2021
• According to documents released by the New York Attorney General (NYAG), Tether deactivated approximately 29 accounts belonging to prominent figures.
• Some of the deactivated accounts belonged to companies such as MoonPay, BlockFi, CMS Holdings, and Galois Capital.
• Tether has said the reasons behind the termination varied for each individual on the list.

Tether, the company responsible for the widely used stablecoin USDT, has responded to concerns about its operational decisions.

According to documents released by the New York Attorney General (NYAG), Tether deactivated approximately 29 accounts belonging to prominent figures in the cryptocurrency industry in 2021. The reasons behind the terminations varied for each individual on the list.

While the company did not disclose the reason for the account terminations, it stated that it would not comment on individual relationships. However, Tether emphasized that all individuals had undergone thorough compliance checks. This was during the onboarding process. Furthermore, they were subject to ongoing monitoring as part of Tether’s compliance policies.

Some of the deactivated accounts belonged to companies such as MoonPay, BlockFi, CMS Holdings, and Galois Capital.

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The NYAG’s investigation concluded in February 2021, but recent revelations indicate that certain documents related to the investigation extend until around June of the same year. To protect privacy, the authorities have redacted user codes within these documents.

The NYAG obtained these documents while investigating Tether and its sister company Bitfinex for their alleged misappropriation of $850 million in funds. During this period, iFinex, the parent company of both Tether and Bitfinex, requested a 30-day extension to produce critical financial documents before the original deadline.

Ultimately, the parties involved reached a settlement, which included Tether agreeing to pay a penalty of $18.5 million and ceasing trading activities in New York. Following this, media outlets and Coinbase requested the NYAG to publicly disclose Tether’s initial quarterly report under the Freedom of Information Act. However, Tether objected to this request, citing the need to protect its customers’ confidential information from potential exploitation by malicious actors.

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Despite the company’s objection, the NYAG granted access to the documents to media outlets, which revealed the deactivation of numerous accounts associated with companies.

It is important to note that firm has faced scrutiny in the past due to concerns about its reserves and transparency. As a stablecoin, Tether is designed to maintain a 1:1 peg with the US dollar, but questions have been raised about the extent to which its reserves are actually backed by fiat currency.

The deactivation of accounts belonging to prominent cryptocurrency players adds to the ongoing discussion and raises further questions about Tether’s operations and relationships within the industry. As the cryptocurrency market continues to evolve, regulatory scrutiny and transparency will remain critical factors in maintaining trust and stability within the ecosystem.