Tether, a prominent stablecoin issuer, has reportedly modified its terms of service (ToS) in Singapore, causing some uncertainty in the cryptocurrency community. An email shared by the CEO of Cake DeFi, a decentralized finance protocol, on September 25 revealed that certain customers were now restricted from redeeming Tether (USDT) due to changes in Tether's ToS.
Cake DeFi's CEO, Julian Hosp, shared an email from Tether, stating that they could not exchange USDT for US dollars anymore due to these changes. Hosp expressed uncertainty about whether Cake DeFi could convert its USDT holdings to US dollars since the company is based in Singapore.
In response to inquiries, a Tether spokesperson emphasized their commitment to regulatory compliance and stated that their terms and conditions (TOC) for their Singaporean entity have remained unchanged since May 2020.
The notable alterations in Tether's ToS include stricter onboarding criteria, explicitly state that entities "controlled by another entity, directors, and shareholders resident in Singapore" are no longer permitted to be Tether customers. This change raised questions within the crypto community, including Cake DeFi , which was informed that it was "controlled by another company in Singapore" and therefore ineligible to issue or redeem USDT on the platform.
Tether's Chief Technology Officer, Paolo Ardoino, dismissed the concerns surrounding the email, labeling it as "FUD" (Fear, Uncertainty, Doubt). Ardoino argued that the policy changes in question have been in effect since 2020. However, Tether did not provide an explanation as to why Cake DeFi received the notification about these changes on September 25.
Some users speculated that the alterations in USDT redemption terms might be specific to Cake DeFi and suggested that the DeFi protocol might be subjected to Enhanced Due Diligence (EDD). This has led to speculation that the issue could be related to a collaboration problem between the two companies.
These changes in Tether's ToS have emerged in the context of a significant cryptocurrency money laundering scandal in Singapore, where seized assets have exceeded $2 billion.
