As part of legal proceedings related to a market manipulation case that dates back to 2019, Katherine Polk Faillaa judge of the United States District Court for the Southern District of New York, ordered Tether’s parent company to provide financial documents related to its stablecoin, USDT.
The court case originated in a complaint filed by a group of investors against iFinexthe entity behind Tether and the cryptocurrency exchange Bitfinex. The plaintiffs claim that the firm issued unbacked USDT in an attempt to drive up the prices of various cryptocurrencies, and thereby manipulated the market.
The New York judge decided to accept plaintiffs’ requests for production (RFP), which demand that iFinex publish “all ledgers, balance sheets, income statements, cash flow statements and profit and loss statements” , according to available court documents.
In her order, the judge said that “the Court finds that Plaintiffs’ requests for financial documents are not exaggerated, particularly in view of the fact that the Defendants had the opportunity to produce samples of the requests for financial documents, but did not do so despite the plaintiffs’ agreement to this proposal”.
“Plaintiffs clearly explain why they need this information: to assess the backing of USDT to US dollars, and to allow a public accountant to assess the reserve of USDT,” according to the judge.
In response to the order, New York law firm Debevoise & Plimpton, which represents iFinex in the case, said the plaintiffs’ claims demonstrate “their inability to actively pursue their case, as well as their unwillingness to ‘adapt their manifestly overbroad requests with respect to the documents relevant to their claims’.
With this in mind, the defendant’s law firm asked the court to dismiss the plaintiffs’ request which it considers “unduly binding on its face, given that Tether is the issuer of a stablecoin and that Bitfinex is a cryptocurrency exchange.”
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