Tether Denies Using Signature Bank To Remit US Customers’ Money To The Bahamas

Key Points:

• Tether does not have direct access to the U.S. banking system, but some recent findings suggest that Signature banking has been used to circumvent the law.
• The world’s largest stablecoin issuer used Signature Bank to transfer U.S. dollars from the U.S. to the Bahamas.
• Even so, Tether’s Chief Technology Officer, Paolo Ardoino, denied it.

According to Bloomberg News, stablecoin issuer Tether used Signature Bank to transfer U.S. dollars from the United States to the Bahamas.

Before Signature Bank closed in March and was taken over by regulators, Tether used the Signet payments platform of Signature Bank to transfer money from U.S. consumers to Capital Union Bank, the issuer’s banking partner in the Bahamas.

According to people who know the situation, Tether instructed crypto customers to pay for its stablecoins by sending dollars to banking partner Capital Union Bank Ltd. based in the Bahamas through Signature’s Signet payments platform.

While it’s unclear when the setup began, it took place when Signature Bank was seized by regulators last month, who said, asking not to be identified because the information was not made public.

“Tether didn’t have any direct or indirect exposure to Signature.”

Tether Chief Technology Officer Paolo Ardoino responds.

Even after regulators closed the bank, Signet, launched in 2019 as a real-time payments network and was a crucial technology for many institutional crypto clients, such as the exchanges Coinbase and Kraken, is still in operation.

Tether recently accused The Wall Street Journal (WSJ) of printing and distributing false information about the company and its procedures. The USDT issuer chastised the Wall Street Journal and other legacy media for writing unfavorable comments about the business while praising other crypto enterprises that were some of the most significant financial catastrophes in history.

Tether’s stability has been proved during moments of market turbulence such as the LUNA and FTX crises. By successfully processing over $20 billion in redemptions from market highs to lows, the firm has shown that it can continue to function as its consumers want it to.

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