Tether revises its Singapore policy – here’s how it impacts USDT holders

Posted: September 26, 2023

• Tether barred certain customer bases from redeeming USDT for United States dollars.
• The updated terms explicitly stated that “corporates controlled by another entity residing in Singapore are no longer permitted to be Tether customers.”

Tether [USDT] has made significant changes to its terms of service (ToS) in Singapore. Julian Hosp, the CEO of Cake DeFi, a decentralized finance (DeFi) protocol, unveiled the alterations when he shared an email he received from Tether on 25 September.

This email showed that Tether prohibited specific customer bases from redeeming USDT for United States dollars.

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

In the message from Tether, the company cited changes in its ToS as the reason behind this sudden policy shift. The email created uncertainty for Cake DeFi, since it was a Singapore-based entity, as to whether they could still convert USDT into U.S. dollars.

Change in onboarding standards cited as reason for shift

The critical alterations in Tether’s ToS revolved around tightened onboarding standards. Notably, the updated terms explicitly stated that “corporates controlled by another entity, directors, and shareholders residing in Singapore are no longer permitted to be Tether customers.”

This newfound clause meant that Cake DeFi fell under the category of “controlled by another corporation in Singapore.”

Therefore, they would no longer be able to issue or redeem USDT through the platform. The situation also raised eyebrows in the crypto community, particularly due to the ambiguity surrounding the term “controlled by another entity.”

However, Tether’s Chief Technology Officer, Paolo Ardoino, stepped in to clarify the situation. He categorically dismissed the speculation surrounding the email as FUD (Fear, Uncertainty, Doubt).

Ardoino asserted that the policy change in question had, in fact, been in effect since 2020. Nevertheless, Tether refrained from providing a clear response as to why Cake DeFi received this notification earlier on 25 September.

Before spreading FUD it would be great if you guys did take a look at webarchive… This is Jan 2022….
And if you open the link below: Last updated: May 12, 2020…
Again, take a moment to search and verify information before YOLO posting.https://t.co/dMbDCxwbdu https://t.co/K7ugOrZMNs pic.twitter.com/NPnitUBbpY

— Paolo Ardoino 🍐 (@paoloardoino) September 25, 2023

This unexpected alteration in Tether’s ToS took place against the backdrop of a significant cryptocurrency money laundering scandal in Singapore. Assets seized from the bust had ballooned to $1.7 billion. The timing and motivations behind Tether’s policy shift remain ambiguous.

Some in the crypto community speculated that the changes in USDT redemption terms might be specific to Cake DeFi. This theory suggested that the DeFi protocol may have triggered enhanced due diligence (EDD) measures. These measures could have potentially signalled a partnership issue between the two firms.