Tether may be under investigation by the SEC. This was revealed by The New Republic journalist Jacob Silverman.
Suspicion of an ongoing SEC investigation into Tether
Jacob Silverman has filed a FOIA request with the SEC, which stands for the Freedom of Information Act. This is a request in which a private citizen can request information about a particular company. But the response he received from the SEC was surprising:
“We are withholding records that may be responsive to your request under 5USC 552 (b)(7)(A). This exemption protects from disclosure records compiled for law enforcement purposes, the release of which could reasonably be expected to interfere with enforcement activities. Since Exemption 7A protects the records from disclosure, we have not determined if other exemptions apply. Therefore, we reserve the right to assert other exemptions when Exemption 7A no longer applies”.
The article that is cited to justify the non-disclosure of the requested information about Tether Operations Limited reads as follows:
“This section does not apply to matters that are records or information compiled for law enforcement purposes, but only to the extent that the production of such law enforcement records or information (A) could reasonably be expected to interfere with enforcement proceedings”.
This denial, along with the cited reasoning, suggest that the SEC is somehow investigating Tether, though it is unclear for what.
Tether: “We constantly work with regulators”
This is just a hypothesis, but there is no certainty that the SEC has actually opened an investigation into Tether.
Questioned on the subject by The Cryptonomist, Tether has not confirmed any investigations by the SEC, but explained that they are constantly working with the authorities:
“We constantly work with regulators and law enforcement around the world and we collaborate on many aspects regarding the broader digital asset industry”.
Tether under observation
Jacob Silverman was conducting an investigation into Tether to clarify certain aspects of the largest stablecoin by capitalization. It is precisely the explosive growth of USDT’s market cap that has brought much attention to it.
Remarkably, in another FOIA request dated February, the SEC replied that it had no material to share. Just over six months later, the SEC admits that it does have materials on Tether, but that it cannot disclose them. This shows that the authority has been collecting information, a sign that it has been monitoring Tether for a few months now.
This has happened despite the fact that Tether has made its reservations public in the past months, thus providing the transparency that was required.
It now remains to be seen whether or not there is actually an investigation going on.