Since the SEC hit Ripple Labs with the charges of selling unregistered securities, the cryptocurrency community has been wondering what does this move mean. Some argued it was a huge sign that US regulators are set to ramp up oversight of the cryptocurrency space as Bitcoin surges to uncharted highs.
The Securities and Exchange Commission has largely cracked down on ICOs and similar crowdfunded token sales, but as XRP is classified by the SEC as a security, then the question is: which crypto asset could face the same fire?
While a number of cryptocurrencies and similar assets are under speculation, Bitfinex Tether CTO, Paolo Ardoino, has stepped in to assuage concerns and said there is no evidence the SEC is coming after them, too.
Ardoino clarified via Twitter that Tether is indeed regulated and was also registered with FinCEN. While pointing out that Tether recently hit $21 billion in market capitalization, he bashes those who echo the deliberate lies, accusing them of spreading FUD.
Reminder: #Tether is registered and regulated under FinCEN as all the centralised competitors. Strict KYC/AML is applied to all Tether direct users, as the other main issuers are doing. Less regulated is just FUD. Ask yourself who benefits from spreading such misinformation? 🤡 https://t.co/0izlgpJ75r
— Paolo Ardoino (@paoloardoino) December 30, 2020
As competitors of the popular stablecoin began to use the regulation card to gain favor with users, Tether handle also confirmed the USDT token is backed by reserves equal to 100 percent of the outstanding coins.
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Tether actively works with global regulators and law enforcement agencies. Furthermore, Tether enforces rigorous KYC and AML procedures and deploys state-of-the-art technologies to monitor transaction activity and the risk profile of token holders. 1/2
— Tether (@Tether_to) December 31, 2020
While the token issuers want to seem unconcerned about a possible lawsuit that could rock the company at its foundation, Tether’s legal woes have been already piling up.
Bitfinex and ist associated token are accused by US regulators of using $700 million from the stablecoin reserves to cover up losses of $850 million. The crypto exchange defended itself, saying the money was deposited with a Panamanian-company called Crypto Capital but then was seized and safeguarded in several jurisdictions, including Poland, Portugal, the UK, and the United States, all through this was no fault of Bitfinex.
In its latest episode, the major crypto exchange lost a legal battle to appeal the court decision that effectively killed its attempt to refrain from handing over documents to the New York Attorney General on the grounds of jurisdictional overreach.
While XRP’s fate is undecided yet, a similar legal action against Tether would be a major blow to other major stabecoins including Circle’s coin, Paxos Standard, and the Gemini Dollar.