Tether (USDT) and Bitfinex get multimillion-dollar fine, what have they done?

The story about Tether and his reserves gets a new twist. US financial regulator, the Commodity Futures Trading Commission (CFTC), fined Tether, issuer of the USDT stablecoin and to sister company Bitfinex, a cryptocurrency exchange.

The companies have reached a settlement with the CFTC and will pay a fine of up to $42.5 million. This is according to an announcement from the regulator, published on October 15:

“From ~1/6/16 to 2/25/19, Tether failed to disclose that it had included unsecured receivables and non-fiat assets in its reserves and falsely claimed it would undergo routine, professional audits to prove that it “held 100% reserves at all times.””

According to the press release about Tether. The company must pay a fine of no less than $41 million for this. In addition, according to the CFTC, Bitfinex would have been guilty of “illegal, unlisted commodities transactions.” The bitcoin (BTC) exchange would also have operated as a so-called “futures commission merchant” without registering with the regulator. The company must pay a fine of $1.5 million for this.

Tether attorney Stuart Hoegner responded to the news in a statement on Twitter. He says that as part of the settlement, Tether and Bitfinex will not admit they made mistakes.

He also says it goes back to an ancient period when Tether had problems with banks and relied on other companies, including Bitfinex, for help with asset safekeeping. According to the lawyer, the CFTC acknowledges that all problems have now been resolved and that the regulator found no violations in Tether’s current activities.

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Tether, whose USDT stablecoin now has a market capitalization of nearly $70 billion, reached a settlement with the New York State Attorney General early this year for a $18.5 million fine on the same subject. Recently, financial news agency Bloomberg also investigated these reserves.

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