Tether, the stablecoin issuer, has responded to a recent court order requiring the company to provide financial records proving the USDT token’s backing. On Tuesday, a New York judge ordered Tether and Bitfinex to produce documents proving the USDT stablecoin’s backing.
The order is part of a three-year-old class actionfiled by a group of investors against Tether Limited and its sister cryptocurrency exchange, Bitfinex. According to the lawsuit, the two companies used the USDT stablecoin to manipulate crypto markets and falsely represented USDT’s backing. Tether and Bitfinex have both denied the allegations.
Plaintiffs David Leibowitz, Benjamin Leibowitz, Jason Leibowitz, Aaron Leibowitz, and Pinchas Goldshtein filed the lawsuit (case number 1:19-cv-09236-KPF) in the United States District Court for the Southern District of New York in October 2019.
Judge Katherine Polk Failla hasthe plaintiffs to continue their legal case after three years.’
“Requests for Production” (“RFPs”), ordering Tether and Bitfinex to produce financial records and transaction records for all trades or transfers of stablecoins or other cryptocurrencies. In the order, the judge stated that “the documents plaintiffs seek are undoubtedly important, as they relate to the backing of USDT.”
The requested documents include all of the firms’ “general ledgers, balance sheets, income statements, cash-flow statements, and profit and loss statements.” Furthermore, the defendants have been ordered to turn over information about their cryptocurrency accounts on exchanges such as Bitfinex, Poloniex, and Bittrex. These records are being requested as part of the discovery process, which involves each party gathering evidence to support their case.
Meanwhile, in a previous letter to the judge, the legal firm Debevoise & Plimpton, which represents Tether and Bitfinex, requested that the court deny the plaintiff’s request, claiming that the “plaintiffs failed to timely raise this dispute.” The plaintiffs are requesting $1.4 trillion in damages.