Tether accessed US banking system using Signature
New York regulators take control of Signature in March there was reportedly a system in place for Tether Clients to send dollars via the bank's signet platform.
Tether, a stablecoin issuer, has accessed the US banking system using Signature Bank. Tether is a cryptocurrency that is pegged to the US dollar, and it is widely used in the crypto world as a means of exchanging value without the volatility that is often associated with other cryptocurrencies.
Accessing the US banking system is significant because it allows Tether to move US dollars in and out of the cryptocurrency markets with greater ease. This is because the US dollar is still the dominant global currency, and many exchanges and trading platforms require dollars in order to facilitate trade.
It is worth noting that Tether has faced some controversy in the past regarding its peg to the US dollar and the level of reserves that it holds to back up that peg. Some critics have raised concerns that Tether may not actually have enough dollars to back up the number of Tethers in circulation. However, Tether has consistently maintained that it has enough reserves to support its peg, and it continues to be widely used in the crypto world.
Tether doesn't have direct access to the US banking system but for a while, it found at least one pathway via Signature Bank.
Tether and Signature reportedly would not have been illegal, failing to disclose information to the investing public would suggest high-risk practice.
According to the New York Department of Financial Service express the shutdown of a signature on March 12 the decision had been made with the Federal Deposit Insurance Corporation in an effort to protect the U.S economy Stablecoin issuer Paxos reported it had $250 million tied to signature while Tether's chief technology officer Paolo Ardoino said the firm didn't have any exposure to the failed bank.