Tether in its email said they found Cake DeFi to be controlled by “another corporation that resides in Singapore,” and thus they won’t be allowed to redeem USDT.
Tether, the largest stablecoin issuer behind USDT, has reportedly changed its terms of services (ToS) in Singapore. An email shared by the decentralized finance protocol Cake CEO on Sept. 25 shows the changes to Tether’s ToS prohibiting certain customer base from redeeming USDT.
The CEO of Cake Group Dr. Julian Hosp took to social media platform X (formerly Twitter) to share the email received from Tether informing that they cannot redeem USDT for USD due to the changes in the ToS of the stablecoin issuer just one day ago.
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
Hosp in his X post noted that based on the recent mail, they are not sure whether they would be able to redeem USDT into USD due to being in Singapore.
The key changes to the ToS of Tether include restricting its onboarding standards and “corporates controlled by another entity, directors, and shareholders residing in Singapore are no longer permitted to be Tether customers.”
The term “controlled by another entity” confused many in the crypto community including Cake DeFi which was informed that they “are controlled by another corporation in Singapore. Accordingly, you will not be permitted to be issued or redeemed from the platform.”
Related: Singapore’s central bank slugs Three Arrows founders with 9-year ban
Many users on X pointed out that the recent change in ToS by Tether comes amid one of the largest crypto money laundering scandals in Singapore where the assets seized from the bust have swelled to over $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 noted that the changes in the USDT redemption term could be a Cake DeFi-specific problem noting that the DeFi protocol is flagged as enhanced due diligence (EDD) and thus it could be a partnership issue between the two firms.
This could be a @cakedefi issue specifically. It’s flagged as EDD – enhanced DD. I’m not suggesting anything is wrong at Cake, just that it could be specific tether / cake relationship issues.
— Hayden (@hayden_9776) September 25, 2023
Cointelegraph reached out to Tether to confirm the email shared by the Cake group COO and enquired about changes in its ToS but has not yet received a response.
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