NY AG’s $850M Probe of Bitfinex, Tether Ends in an $18.5M Settlement
In a closely watched case with wide-ranging implications for the crypto market, Tether has admitted no wrongdoing and will provide reports on USDT’s reserve composition for two years.
news coming from Nikhilesh De via CoinDesk
In a statement, New York Attorney General Letitia James said, “Bitfinex and Tether recklessly and unlawfully covered up massive financial losses to keep their scheme going and protect their bottom lines. Tether’s claims that its virtual currency was fully backed by U.S. dollars at all times was a lie.”
The settlement may help resolve, one way or another, a question that has long bedeviled the entire $1.6 trillion global cryptocurrency market. By requiring Tether to provide a greater level of transparency than ever about the backing of its USDT stablecoin – a foundational piece of crypto’s plumbing – the arrangement could replace whispers and conjecture with regular data.
New York’s attorney general sued Bitfinex and Tether nearly two years ago.
Today, they settled for $18.5 million. Tether and Bitfinex have to pay $18.5 million in fines and, perhaps more damaging, cease all trading activities in New York State.
For the next two years, they’ll also be required to submit quarterly reports about how much money they have in their reserves, as well as how they’re working to exclude New Yorkers from their services.
The Attorney General has also mandated that Tether and Bitfinex include information about transfers of funds, along with “verification that Bitfinex and Tether have appropriately segregated client, reserve, and operational accounts.”
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