USDT Tether is the largest stablecoin by market cap. The stablecoin publisher, Tether, is reported to have provided access to banks in the United States through the Signature Bank payment platform.
Through Signature Bank's Signal platform, Tether provides access to the United States' banking system by appointing users to deliver dollars via Signet to the Capital Union Bank in the Bahamas. Although not illegal, this decision caused concern because Tether did not disclose this information to the public.
According to a Bloomberg report on April 4, the system was still in effect when regulators took control of Signature in March. Nonetheless, a Tether spokesperson stated that banks used by stablecoin publishers "always have access to multiple banking and partner channels" and related entities "will not be affected by direct or indirect exposure to Signature."
On March 12, the New York Treasury Department announced the closure of Signature with the aim of "protecting the United States economy." Stablecoin publisher Paxos reports that it has USD 250 million (IDR 3.7 trillion) tied to Signature, while Tether technology chief Paolo Ardoino said the company had no exposure to the failed bank.
While Tether does not have direct access to the United States banking system, the use of this shortcut could cast doubt on the security practices implemented by the company. In addition, this cryptocurrency-friendly bank closed its client's crypto account on April 5.
US policymakers continue to review the fall of this cryptocurrency-friendly bank. When attending a hearing on March 28, FDIC chairman Martin Gruenberg said that Signature was unable to manage banking risk traditionally.
As reported by Cointelegraph, one of the bank's users even filed a lawsuit, accusing the bank of "helping and helping" the fraud committed by former FTX CEO Sam Bankman-Fried.
Signature plans to sell around 38 billion US dollars (Rp567 trillion) in deposits and 13 billion US dollars (Rp194 trillion) in loans to Flagstar Bank, a subsidiary of New York Community Bancorp. Gruenberg said that $4 billion in crypto deposits is likely to be returned to users in the near future.
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