Metropolitan Bank Says It Shut Down Tether's Account After 5 Months

Metropolitan Commercial Bank maintained accounts for stablecoin issuer Tether and affiliated companies for less than half a year before shutting them down, a spokesperson told CoinDesk.

The New York Attorney General (NYAG)'s office, which is embroiled in a legal battle with Tether and its sister company, crypto exchange Bitfinex, filed new documentation Monday showing that Tether held accounts at Metropolitan Bank and Signature Bank, two crypto-friendly banks based in the state.

These documents were presented as evidence for the NYAG's argument that it has the legal authority to investigate the companies because they had New York customers.

However, Metropolitan's relationships with Tether; Bitfinex's parent company iFinex; and Digfinex (the majority owner of Tether and iFinex) appear to have been brief.

A spokesperson for the bank told CoinDesk Wednesday that there was only minimal activity with the three accounts, saying in an email:

The spokesperson clarified that the bank itself requested that the accounts be closed, not Tether, iFinex or Digfinex.

A spokesperson for Signature Bank would not discuss the matter, telling CoinDesk that "we do not comment on client-related matters."

A spokesperson for the exchange did not immediately return a request for comment.

The NYAG is investigating Bitfinex's alleged cover-up of an $850 million loss by borrowing potentially up to $900 million from Tether's reserves. The reserve is theoretically in place to back the USDT stablecoin, which Tether previously claimed was backed 1 to 1 by U.S. dollars.

Bitfinex, Tether and their affiliates have until July 22 to file a response to the NYAG's latest motion. The case itself will be back in court a week later, with a hearing scheduled for July 29.

Image via Metropolitan Commercial Bank