Tether flees from banks, Ledger’s backdoor for seed phrases and more

Banks want to reduce exposure to crypto businesses, just as crypto businesses are seeking to reduce exposure to the ongoing banking crisis. Tether’s latest audit report shows that the stablecoin issuer withdrew over $4.5 billion from banks in the first quarter to reduce counterparty risk following Circle’s troubles during the collapse of Silicon Valley Bank.

The past few days also brought a change in the winds to Ripple’s battle with the United States Securities and Exchange Commission (SEC), with a motion from the securities regulator to seal some records rejected by a U.S. judge. The move has been viewed as a victory for Ripple, which considers the documents key evidence in its costly dispute with the regulatory agency.

This week’s Crypto Biz explores Tether’s first quarter audit, Ripple’s partial victory against the SEC, Worldcoin fundraising and Ledger’s controversial recovery service.

Court victory for Ripple as judge denies SEC motion to seal Hinman docs

A motion from the U.S. securities regulator to seal records of internal deliberations has been denied in a move seen as a win for Ripple and the crypto community. The SEC filed the motion on Dec. 22, 2022, to seal internal emails, text messages and expert reports after a speech from its former director William Hinman claimed Ether (ETH) — the native token of the Ethereum blockchain — is not a security. Ripple considers the speech a key piece of evidence in its ongoing legal battle with the SEC, which alleges that sales of Ripple’s XRP (XRP) token violated U.S. securities laws. Ripple has spent over $200 million defending itself against SEC allegations.

Another win for transparency! Unredacted Hinman emails to be publicly available soon – stay tuned as the lawyers work through the mechanics to make that happen. https://t.co/o6puPypRHd https://t.co/qmaLVeQaP8

— Brad Garlinghouse (@bgarlinghouse) May 16, 2023

Tether boasts of its financial stability after strong profits, money moved out of banks

Stablecoin operator Tether pulled over $4.5 billion out of banks in the first quarter of 2023, leading to a “substantial reduction” in counterparty risk, the company said in its latest audit report. The market capitalization of its Tether (USDT) stablecoin grew from $66 billion to over $82 billion in the same period. The company boosted its U.S. Treasury bills to a new high of over $53 billion, or 64% of its reserves. Combined with other assets, USDT is now backed by 85% cash, cash…