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  • Thousands of rumors on social media have been posted stating that Tether (USDT) would be the next target of the SEC.
  • It seems that Tether is not under investigation for its security status and is considered a commodity.

Tether is not under investigation by the New York Attorney General (NYAG) for its security status, but rather for committing fraud and making false claims. Many analysts and cryptocurrency enthusiasts have warned others about Tether and their claims about reserves backing up the stablecoin. 

Apparently, Tether is accused of using co-mingled client funds and losing close to $1 billion of these funds in 2018. 

According to documents provided to OAG by Respondents, and based on statements made by counsel for Respondents to OAG attorneys. an individual at Crypto Capital told the senior Bitfinex executive the reason that funds totaling $851 million could not be returned to Bitfinex was because the funds were seized by governmental authorities in Portugal. Poland, and the United States. Based on statements made by counsel for Respondents to OAG attorneys, Respondents do not believe Crypto Capital’s representations that the funds have been seized.

Fortunately for the cryptocurrency industry, the NYAG actually argues that USDT is a commodity and not a security which means US exchanges are not likely to delist it any time soon, at least not because of its security status. 

Additionally, the collapse of Tether will most likely push Bitcoin price and other currencies as holders will try to dump their USDT stablecoins as quickly as possible for any other cryptocurrency to save losses.