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Home Crypto News Market CFTC Fined Bitfinex And Tether To Pay $42.5 Million Over USDT Backing

CFTC Fined Bitfinex And Tether To Pay $42.5 Million Over USDT Backing

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The United States Commodity Futures Trading Commission (CFTC) has settled claims against Tether and Bitfinex, ordering the company to pay fines totaling $ 42.5 million, the regulator’s said on their website in an official press release.

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According to the order, Tether was fined $41 million for “false or misleading statements” that USDT was fully backed by U.S. dollars.

The company was accused of violating the Commodity Exchange Act (CEA) by making misleading statements about the USDT stablecoin being backed one-to-one by U.S. dollars.

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Despite claiming that the stablecoin was fully pegged to the value of the greenback, the order says that Tether had sufficient reserves less than a third of the 26-month period (from 2016 to 2018). Tether also did not perform professional audits during the aforementioned time sample:

“The order further finds that Tether failed to disclose that it included unsecured receivables and non-fiat assets in its reserves and that Tether falsely represented that it would undergo routine, professional audits to demonstrate that it maintained “100% reserves at all times” even though Tether reserves were not audited.”

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The CFTC also simultaneously slapped iFinex, the parent company of the Bitfinex exchange, with a $1.5 million fine for performing off-exchange retail commodity transactions.

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Acting Director of Enforcement Vincent McGonagle says that these actions were meant to promote market integrity:

“As demonstrated by today’s actions against Tether and Bitfinex, the CFTC is committed to carrying out its statutory charge to promote market integrity and protect U.S. customers.”

Tether sounded upbeat in his tweet, claiming that the company can finally put the multi-year investigation behind them.

 

In its official statement, Tether says that the CFTC has found no issues with the company’s current operations.

“The CFTC’s Order found no issues relating to Tether’s current operations. In fact, the Order related to certain disclosures about the reserves from more than two and a half years ago. As the Order recognizes, these issues were fully resolved when the terms of service were updated in February 2019.”

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This February, Tether also reached an $18.5 million settlement with New York Attorney General Letitia James.

In late September, it also scored a significant legal win in a trillion-dollar market manipulation suit.

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Albert Brownhttps://thecryptobasic.com/
Albert Brown is a crypto journalist interested in technology and technical innovations. He has been in crypto since 2017. Believes that blockchain and cryptocurrencies have a potential to transform the world in the future in many of its aspects. Holds major cryptocurrencies and has written for multiple crypto media outlets. His articles have been quoted by such crypto influencers as Tyler Winklevoss, John McAfee, CZ Binance, Max Keiser, etc.

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