Tether's Attempt to Block CoinDesk's Request for Stablecoin Reserve Records Dismissed by New York Court

CoinDesk filed a Freedom of Information Law request for documents about Tether's reserves in 2021.

AccessTimeIconFeb 10, 2023 at 5:39 p.m. UTC
Updated Feb 10, 2023 at 7:45 p.m. UTC

A New York judge on Friday rejected an attempt by iFinex and related companies, which include cryptocurrency exchange Bitfinex and stablecoin issuer Tether, to block CoinDesk's request for information about the financial reserves backing the USDT token.

New York Supreme Court Justice Laurence Love ruled that he would deny and dismiss the companies' petition to block CoinDesk's Freedom of Information Law (FOIL) request to the New York State Attorney General's (NYAG) office for documents. The NYAG's office investigated Tether and Bitfinex on allegations that USDT, the 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.

USDT is the world's largest stablecoin, currently worth about $68 billion, and serves as a key piece of infrastructure in the crypto ecosystem that facilitates the movement of money around the globe.

In June 2021, CoinDesk filed a FOIL request for some of the documents from that inquiry, specifically asking 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.

Tether did not prove it would suffer a "substantive competitive injury" that would meet the FOIL rules' parameters, the judge wrote in his ruling Friday, adding that he reviewed materials submitted by the crypto companies and found "absolutely no items that could be described as unpredictable or proprietary."

"The Court doubts that Petitioners could develop a more boilerplate protocol if they tried," the judge wrote.

Tether and its sibling companies may still appeal the ruling.


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Nikhilesh De

Nikhilesh De is CoinDesk's managing editor for global policy and regulation. He owns marginal amounts of bitcoin and ether.