Tether, one of the largest stablecoin issuers, has reportedly updated its terms of service for users based in Singapore. An email shared by Julian Hosp, CEO of decentralized finance (DeFi) protocol Cake DeFi, reveals Tether can no longer redeem its USDT stablecoin for US dollars from certain customers in Singapore.
In the email, Tether stated that due to changes in its terms of service, it cannot facilitate USDT redemptions for Cake DeFi, which is based in Singapore. Tether claimed Cake DeFi is “controlled by another corporation that resides in Singapore,” which precludes them from being able to redeem USDT per the new terms.
The key changes outlined in Tether’s updated terms of service include more restrictive onboarding standards, with entities controlled by other corporations, directors, and shareholders residing in Singapore no longer permitted to be Tether customers.
This “controlled by another entity” phrasing confused many in the crypto community, including Cake DeFi which was told it fell under this designation and would not be allowed to redeem USDT. Tether CTO Paolo Ardoino dismissed speculation around the email, stating the policy change has been in effect since 2020. However, he did not clarify why Cake DeFi was only just recently notified.
Some in the crypto community speculate Tether’s Singapore terms of service update may relate to the major cryptocurrency money laundering case in Singapore, where over $2 billion in assets have been seized. Others theorized the change could be specific to Cake DeFi, suggesting they may be flagged for enhanced due diligence by Tether, making it a potential partnership issue.
The reasoning behind Tether’s updated terms of service remains unclear. The changes highlight the growing regulatory scrutiny stablecoins are facing across different jurisdictions.
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