Stablecoin issuer Tether has made significant changes to its terms of service (ToS) in Singapore, barring certain customer bases from redeeming its USDT stablecoin for United States dollars. The alterations to the ToS were revealed by Julian Hosp, CEO of Cake DeFi, a decentralized finance protocol based in Singapore, on Tuesday.
The updated ToS now states that "corporates controlled by another entity, directors, and shareholders residing in Singapore are no longer permitted to be Tether customers." This change has created uncertainty for Cake DeFi and other entities in Singapore regarding their ability to redeem USDT into U.S. dollars.
Hosp expressed his concerns about this change via an email he received from Tether on Monday, stating that due to being based in Singapore, he was unsure if Cake DeFi could ensure the redemption of USDT into U.S. dollars. The email from Tether cited changes in its ToS as the reason behind this sudden policy shift.
The crypto community has been puzzled by the phrase "controlled by another entity," with many speculating that these changes might be specific to Cake DeFi and could signal potential partnership issues between the two firms.
Paolo Ardoino, CTO of Tether, clarified that the policy change has been in effect since 2020. However, he did not provide a clear response as to why Cake DeFi received this notification earlier on Monday.
These changes have occurred against the backdrop of a major cryptocurrency money laundering scandal in Singapore, with assets seized from the bust amounting to $1.7 billion. The timing and motivations behind Tether's policy shift remain unclear.
A Tether spokesperson reaffirmed the company's commitment to compliance with global regulations, including those set forth by Singapore regulators. They stated that the onboarding process is meticulous and remains a cornerstone of their platform.
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