Did Tether Shut USDT Redemption For Singapore Customers?

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Tether has communicated to Cake DeFi that since the latter is controlled by “another corporation that resides in Singapore,” it is precluded from redeeming USDT. 

Cake DeFi CEO Reveals Tether Communication

Julian Hosp, CEO of Cake DeFi, shared an email he received from Tether outlining the modifications to its terms. The key takeaway from these changes is that Tether will no longer facilitate the conversion of its stablecoin, USDT, into U.S. dollars. 

The heart of Tether’s altered terms lies in the limitations imposed on specific customer categories. The company has just recently opened up its USDT loans after halting them for a year.

Notably, these terms now prohibit companies influenced by another corporation, as well as directors and stakeholders in Singapore, from becoming eligible Tether clients.

Reactions And Speculations

The term “influenced by another corporation” has raised eyebrows within the cryptocurrency community. Cake DeFi received a directive categorizing them as a firm “influenced by another corporation in Singapore,” rendering them ineligible for issuing or receiving redemptions on Tether’s platform.

This Tether term alteration has not gone unnoticed, particularly by users on social media platforms like X (formerly known as Twitter). Some have linked it to Singapore’s recent cryptocurrency money laundering case, where authorities seized over $2 billion in assets. 

Additionally, there are speculations that these changes in USDT redemption rules specifically target Cake DeFi, fueling suggestions of potential strains in their relationship with Tether.

Tether’s Response

In response to these developments, a Tether spokesperson responded, emphasizing their commitment to regulatory compliance. 

They said, 

“Tether has a meticulous onboarding process which is in full compliance with global regulations, including the guidelines set forth by Singapore regulators. This commitment to compliance is unwavering and remains a cornerstone of our platform.”

Tether’s CTO, Paolo Ardoino, also mentioned on Twitter that Singapore had been listed as a Prohibited Jurisdiction since May 12, 2020, and that their Terms and Conditions related to Singapore entities had remained unchanged since then. 

However, Tether did not address why Cake DeFi received the notification only on September 25, 2023. 

Implications for Crypto Landscape

Tether’s decision could have immediate consequences for businesses like Cake DeFi. Furthermore, these changes may have broader implications for the cryptocurrency ecosystem in Singapore and potentially beyond.

Despite the motivations behind Tether’s move being unclear, this situation underscores the importance of adaptability and responsiveness for both companies and investors operating in the cryptocurrency space, especially in the backdrop of the current fluctuating regulatory environment. 

Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.