Tether Deactivated Accounts of MoonPay, BlockFi and CMS Holdings by 2021

According to newly released legal documents related to a settlement, Tether, the issuer of stablecoin, has deactivated the accounts of several prominent crypto companies this year, as reported by the New York Attorney General.

A source with knowledge of the situation has provided a list of deactivated accounts, which includes companies such as MoonPay, BlockFi, CMS Holdings, and Galois Capital. BlockFi is currently undergoing bankruptcy proceedings while Galois Capital has already shut down.

The list consists of both companies and individuals who were terminated for various reasons. Interestingly, some of the documents date back to June 2021, even though the NYAG investigation concluded in February of the same year.

“We do not want to comment on any individual relationship, but everyone did pass the strict compliance checks at onboarding and ongoing monitoring required by Tether’s compliance policies,” Tether said in a statement earlier today.

One of the deactivated accounts was BK Offshore Fund, which faced a lawsuit from the U.S. Securities and Exchange Commission in February 2023.

The allegations against the fund claimed that it engaged in fraudulent activities, mixed investor funds, and distributed Ponzi-like payments totaling $3.6 million to investors before its collapse in 2022.

According to recently released documents by the New York Attorney General, it has been revealed that Tether, the issuer of stablecoin, had partially backed their stablecoin with Chinese securities.

Despite denying any such claims previously, Tether held securities from companies like China Construction Bank Corp. and Agricultural Bank of China Ltd.

There have been rumors circulating for some time now that Tether had used Chinese securities as backing for its stablecoin.

Although Tether has not commented on the matter, it did release a statement in September 2021 denying any holdings of commercial paper from troubled Chinese real estate company, Evergrande. In July, Tether stated that it did not hold any Chinese commercial paper at that time but did not disclose whether it had done so previously.