The Tether Battle Is Over but the War Lies Ahead

2 min readMar 1, 2021
  • Tether’s legal battle may be over, but the war is still being fought
  • The company must file quarterly transparency reports, something they haven’t managed to do in seven years
  • Only after the first report will we know the true health of the company

Following the resolution of the Bitfinex/Tether case last week, the cryptocurrency world breathed a collective sigh of relief now that the ‘Tether FUD’ was over (despite it not being FUD at all). As part of the settlement, which saw Tether’s parent company iFinex agreeing to pay an $18.5 million penalty in return for concluding the case, Tether must submit quarterly filings to the Office of the Attorney General (OAG) to show that every one of its USDT tokens is backed. However, the fact that they have been either unable or unwilling to provide such information at any point since the first USDT token was minted in 2014 suggests that this process may not be as easy as the community thinks, and that the threat of a Tether collapse may not be over after all.

Tether Can’t Afford to Perpetuate Prior Vagueness

Tether’s agreement to file quarterly transparency reports is, on the surface, good news. If all goes well, the voracity of every single USDT token will be verified. But what if everything doesn’t go well? What if the information they provide isn’t considered satisfactory by the OAG and is not accepted?

After all, Tether has never yet managed to provide anything like this despite almost five years’ worth of demands. What makes anyone think they’ll suddenly be able to rustle up the right information every quarter for two years?

Failure to Prove 2020–21 Backing Unthinkable

In Tether’s favor is the fact that the transparency reports may only cover coins minted past a certain date, meaning that the coins that were part of the OAG investigation could have been ‘accounted for’ and no longer need to have proof of backing.

This will relieve the burden on Tether, who should be able to easily account for their mass printing of the past 12–18 months. What would happen if they can’t is the stuff of nightmares for the crypto community.

All Eyes on First Quarterly Report

The Tether issue will not be resolved until the first quarterly report is received and vetted by the OAG. If everything is fine then the community can legitimately breath its communal sight of relief. If however there are discrepancies or any sort then the specter of a market-wide crash will rear its head again, and this time even Tether’s staunchest defenders will find it hard to back the company.

Originally published at on March 1, 2021.