Tether Blocks Users Redeeming USD: Singapore Customers Hit Hard by Asian Regulations
Tether forbid certain client base from redeeming USDT in Singapore | Credit: Shutterstock
Key Takeaways
- According to Cake Group CEO, Tether made changes to its Terms of Service (ToS) in Singapore.
- Modifications include stricter onboarding rules and the prohibition of certain entities from being Tether customers.
- Alterations may be specific to Cake DeFi due to the protocol’s categorization as enhanced due diligence (EDD).
According to reports , Tether, the second-largest stablecoin issuer, has modified its terms of service (ToS) in Singapore.
The changes to Tether’s Terms of Service that prevent a certain customer base from redeeming USDT were revealed in an email posted by the CEO of the decentralised financial platform Cake on September 25.
Can’t Exchange USDT for USD
Cake Group CEO Dr. Julian Hosp shared an email from Tether on social media (formerly Twitter), revealing that Tether couldn’t exchange USDT for USD due to recent changes in its Terms of Service.
Tether told CCN the company 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. It’s worth noting that our Terms and Conditions (TOC) related to Singapore entities have remained unchanged since May 2020,” the company stated.
According to a recent correspondence, according to Hosp’s X post, they are unsure if they would be able to convert USDT into USD because they are in Singapore.
Tether’s key changes to its Terms of Service involve stricter onboarding rules and a ban on entities controlled by others, along with Singapore-based directors and shareholders, from being Tether customers.
Concerns Amidst $2Bn Money Laundering Scandal
Cryptocurrency enthusiasts, including Cake DeFi, were baffled by the term ‘managed by another entity’ when it was revealed that they were ‘controlled by a Singapore-based company,’ which would prevent them from issuing or redeeming on the platform.
Many users on X drew attention to the fact that Tether recently changed its terms of service (ToS) in the midst of one of the biggest cryptocurrency money laundering scandals in Singapore, where the assets recovered in the investigation have grown to exceed $2 billion.
Another user suggested that the changes to the USDT redemption period could be specific to Cake DeFi, possibly due to its enhanced due diligence (EDD) status, implying a potential issue in the business relationship between the two organizations.
MAS Completes Regulatory Framework for Stablecoins
Last month, the central bank and financial regulatory body of Singapore, the Monetary Authority of Singapore (MAS), has unveiled a new framework for stablecoin regulation that aims to “ensure a high degree of value stability for stablecoins regulated in Singapore.”
Similar restrictions apply to other single-currency stablecoins (SCS) linked to the Singapore dollar or G10 currencies, including the euro, U.S. dollar, and British pound. This includes the two largest stablecoins by market cap, Tether (USDT) and USD Coin (USDC).
“MAS’ stablecoin regulatory framework aims to facilitate the use of stablecoins as a credible digital medium of exchange, and as a bridge between the fiat and digital asset ecosystems. We encourage SCS issuers who would like their stablecoins recognised as “MAS regulated stablecoins” to make early preparations for compliance,” stated Ho Hern Shin, Deputy Managing Director (Financial Supervision) at MAS.
