Leading stablecoin Tether (USDT) has gained access to the US financial system using Signature Bank, one of the banks that collapsed in the bank crisis, according to a Bloomberg report. However, the altcoin project’s CTO, Paolo Ardoino, in response to the report, denied allegations that the company was using Signature Bank.
This altcoin has accessed the US banking system using Signature!
cryptocoin.comAs you follow, New York regulators took control of Signature in March. Tether, the firm behind the largest stablecoin by market capitalization, has allowed its customers to send funds through Signature Bank’s payment platform, giving the firm access to US banks, according to a Bloomberg report.
According to an April 4 report from Bloomberg, the altcoin project had a route to the US banking system by instructing its users to send dollars to its Bahamian partner Capital Union Bank via Signature’s Signet. Citing “people with knowledge of the situation,” the report said the system was in place when regulators took control of Signature in March.
While the agreement between Tether and Signature is reportedly not illegal, failure to disclose such information to the investing public would indicate high-risk practices. According to a Tether spokesperson, banks used by the stablecoin issuer “always had access to various banking channels and counterparties” and partner entities would not be affected by ‘direct or indirect exposure to Signature.’
Tether’s chief technology officer denied exposure!
The New York Department of Financial Services announced the shutdown of Signature on March 12, saying at the time the decision was made with the Federal Deposit Insurance Corporation (FDIC) in an effort to “protect the U.S. economy.” Stablecoin issuer Paxos reported that it had $250 million tied to Signature at the time, while Tether chief technology officer Paolo Ardoino said the firm had no exposure to the failing bank.
US lawmakers continue to scrutinize the collapse of the crypto-friendly bank, the third in a chain that started with Silvergate and Silicon Valley. At the March 28 session of the Senate Banking Committee, FDIC Chairman Martin Gruenberg said that Signature had not adequately managed the risks of traditional banking. While Signature has reduced its exposure to digital assets following the collapse of the FTX exchange, one user has filed a lawsuit alleging that the bank “aided and abetted” fraud facilitated by former FTX CEO Sam Bankman-Fried.
The bank plans to sell approximately $38 billion in deposits and $13 billion in loans to Flagstar Bank, a subsidiary of New York Community Bancorp. Gruenberg said that $4 billion in crypto deposits will likely be returned to users later this week.
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For the continuation of the article, Critical Claim: Altcoin Bought by Turks Was Working with a Failed Bank!