Tether, Bitfinex to Drop Opposition to New York Freedom of Information Law Request

Stablecoin issuer Tether and sister company Bitfinex agreed to drop opposition to a New York Freedom of Information Law (FOIL) request brought by a group of journalists, including Bloomberg Businessweek's Zeke Faux, the author of the book "Number Goes Up."

The firms said in a statement that the move is part of their "commitment to transparency," although opposition doesn't mean a complete release of all of its documents. "However, it's essential to clarify that transparency does not mean a wholesale release of all our documents. This approach is not in line with standard business practices," the statement said.

Tether previously made a similar announcement after losing in court twice when attempting to block a June 2021 FOIL request filed by CoinDesk. That request pertained to documents produced during the New York Attorney General's inquiry on allegations that USDT, the U.S. dollar-pegged stablecoin that Tether issues, was not sufficiently backed by reserves from mid-2019 to early 2021, settling charges with the company at the end of that period.

Read more: Tether’s Banking Relationships, Commercial Paper Exposure Detailed in Newly Released Legal Documents

In the FOIL request, CoinDesk specifically asked for documents about Tether's reserves. The stablecoin issuer petitioned the New York Supreme Court to block the release of these documents. CoinDesk joined the case to argue for releasing the documents in the public interest. Tether opposed CoinDesk's involvement, which a New York judge dismissed.

In Friday's statement, the companies said that they won't appeal against the FOIL request by some journalists but remain "open to constructive engagement with journalists and regulatory authorities who adhere to ethical reporting standards and respect data privacy boundaries."

USDT is the world's largest stablecoin, currently worth about $88.5 billion. It serves as a critical infrastructure in the crypto ecosystem that facilitates the movement of money around the globe.

In his book, Faux noted the use of USDT in various illicit activities, including "pig butchering" scams. Tether and the U.S. Department of Justice announced they froze funds tied to such scams over the past week.

Read more: Reviewing the Tether Documents