A top executive at stablecoin issuer Tether (USDT) is addressing recent reports alleging that the company had exposure to collapsed bank Signature Bank.
Tether’s chief technology officer, Paolo Ardoino, tells his 202,000 Twitter followers that the firm had no exposure to Signature Bank, directly or indirectly, despite a recent article by Bloomberg claiming that Tether used the bank to find its path into the US financial system.
“As I stated on 12th of March 2023, Tether didn’t have any direct or indirect exposure to Signature. Good risk management where everyone failed…
I stand by my point about exposure. TradFi [traditional finance] guys annoyed Tether doesn’t blindly trust banks…”
Recently, anonymous sources familiar with the matter detailed to Bloomberg how Tether struck a deal with Signature Bank to find its way into the US banking system.
The sources say the Hong Kong-based stablecoin issuer would instruct its clients to purchase USDT by sending US dollars to its partner in the Bahamas using Signature’s payment platform.
According to Bloomberg, though it was not transparent when the deal was struck, it was still in place when Signature Bank collapsed last month and fell under the control of the Federal Deposit Insurance Corporation (FDIC).
Alma Angotti, a former high-ranking member of the U.S. Securities and Exchange Commission (SEC), tells Bloomberg that if Signature Bank knew about and approved the deal, it could mean the bank was willing to take risks.
“They may well have known and decided this is less risky than opening up an account for Tether directly.”
According to the report, executives of Tether attempted to open accounts with Signature Bank in 2018, but were rejected.
Don't Miss a Beat – Subscribe to get email alerts delivered directly to your inboxFeatured Image: Shutterstock/klyaksun/WhiteBarbie