Tether Blocks Users Redeeming USD: Singapore Customers Hit Hard by Asian Regulations

Last Updated September 26, 2023 9:27 AM

By Teuta Franjkovic

Edited by Giuseppe Ciccomascolo

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.

Ok, so, I won't be able to tell you if redeeming $USDT into $USD is actually possible, due to being in #Singapore , which was a recent change to the @Tether_to ToS from one day to another. Interesting. pic.twitter.com/1YzNqkbjMO

— Dr. Julian Hosp (@julianhosp) September 25, 2023

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.

?? ? 1 month after the massive money laundering bust in Singapore, Tether restricts customers in Singapore

Crypto firms have flocked to SG recently for friendlier regs. This could be a huge blow

W/ the HKG crackdown, the gates to Asia are closing for the crypto cartel https://t.co/yVu79bJHgb

— Rho Rider (@RhoRider) September 25, 2023

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.

?Ω?#Tether updated its terms of service.

"Tether has changed its ToS to, among other things, restrict its onboarding standards. Corporates controlled by another entities, directors, shareholders residing in Singapore are no longer permitted to be Tether customers." pic.twitter.com/Wu4eVKKgaC

— ⚯ M Cryptadamus ⚯ | @[email protected] (@Cryptadamist) September 25, 2023

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.

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About the Author

Teuta Franjkovic

Teuta is a seasoned writer and editor with more than 15 years of experience. She has expertise in covering macroeconomics and technology as well as the cryptocurrency and blockchain industries. She has worked for several publications as a journalist and editor, including Forbes, Bloomberg, CoinTelegraph, Coin Rivet, CoinSpeaker, VRWorld and Arcane Bear. Teuta began her professional career in 2005, working as a lifestyle writer at Cosmopolitan in Croatia. From there, she branched out to several other publications, covering mainly business and the economy. She then turned her attention to the world of cryptocurrency and blockchain, believing that crypto is among the most important inventions in the history of humanity. Her involvement in fintech began in 2014 and she has since lent her expertise in writing, editing and gathering information about the world of crypto, blockchain, NFTs and Web3. An all-round news hound, mentor, editor, and writer, Teuta enjoys teamwork and good communication. She holds a WSET2 diploma and has a thing for chablis, punkrock music and shoes. She also holds a double MA in Political science and Entrepreneurship.

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