Tether, a leading stablecoin issuer, reportedly used Signature Bank’s Signet platform to access the US banking system. The move is expected to improve Tether’s banking capabilities amid increased regulatory scrutiny for stablecoins. Tether’s use of Signet allows for instant money transfers between established banks, providing a secure and efficient solution for US banking services. This latest development reinforces the growing popularity of stablecoins among institutional investors and underscores the importance of secure and reliable banking solutions for cryptocurrency firms.
Tether Used Signature Bank’s Proprietary Software to Transfer Funds to the US
After Signature Bank collapsed last month, most of its assets and some of its loans were taken over by New York Community Bancorp (NYCB). All crypto-related clients, however, were told that their accounts would be closed in short order. Signet, Signature Bank’s proprietary software that allowed its crypto clients to transact in USD between such platforms at all hours of the day, remained in receivership at the FDIC.
When Signature originally went under, Tether’s CTO Paolo Ardoino stated that Tether had no exposure to Signature Bank. While Tether did not have an account opened at Signature, unnamed sources have stated that the firm did use Signet as a way to transfer funds to the US, according to Bloomberg.
In order to pay for USDT, Tether instructed customers to send money via Signet to Bahamas-based Capital Union Bank Ltd., one of the banks tied to the company, along with Deltec Bank & Trust Ltd. and Cantor Fitzgerald Ltd. When reached for comment, Tether stated that the use of Signet was only one of several ways that they maintained links to the global banking system.
No accusations of wrongdoing have been made against Signature Bank, and its employees are likely to remain without accusations leveled at them.
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Is Tether in Trouble for Using Signature Bank’s Proprietary Software?
Tether, a leading stablecoin issuer, used Signature Bank’s proprietary software to transfer funds to the US. While the firm did not have an account opened at Signature, unnamed sources have stated that they did use Signet as a way to transfer funds to the US.
Bloomberg has reported that Tether instructed customers to send money via Signet to Bahamas-based Capital Union Bank Ltd., one of the banks tied to the company.
Although Tether declined to comment on the timeframe of Signet’s use by the company, they stated that the use of Signet was only one of several ways that they maintained links to the global banking system.
No accusations of wrongdoing have been made against Signature Bank, and its employees are likely to remain without accusations leveled at them. While it’s unclear whether Signature Bank knowingly approved the use of Signet by Tether, it could have been a way of dealing with Tether without taking on all the risk of working with an offshore stablecoin company.
Tether has never been sanctioned and dealing with the firm in any capacity would not have engendered any legal risk for Signature Bank. Therefore, Signature Bank’s involvement with Tether is likely to be a non-issue in the future.