More details are emerging about embattled Tether following the lawsuit against the crypto project and Bitfinex. In the latest update, Tether has admitted to investing some of its reserves in Bitcoin. This came from the lawyer of the company who revealed it in a transcript of the court proceedings.
Before April 24th
Tether and Bitfinex were sued by the Attorney General of New York on the 24 of April after court documents were issued stating that Bitfinex used some reserves of Tether USDT to cover up for $850 million of users’ funds that were lost on the exchange. Counsel to Tether David Miller in court on the 16 of May admitted that Tether actually used some its reserves to invest in Bitcoin and other assets. The transcript of the hearing reads:
“Prior to the April 24th order … Tether actually did invest in instruments beyond cash and cash equivalents, including bitcoin, they bought bitcoin.”
The good news for Tether, however, is that the presiding judge, Judge Joel M. Cohen granted it the permission to invest its reserves in other assets as part of its operations. The judge however issued a court injunction with the following orders, which is to last for 90 days. It says Tether shall not:
“Restrain access to credit lines on USD reserves held by Tether
Principals, executives, and agents of Bitfinex shall not receive distribution or dividends from funds received from Tether
Not tamper with the documents that NYAG originally requested”
The NYAG, however, can file for an extension of the injunction for up to 14 days.