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Stablecoin Tether (USDT) and crypto exchange Bitfinex have reached a settlement with the New York State Attorney General.
The agreement requires Tether and Bitfinex to cease any further trading activity with New Yorkers, as well as pay $18.5 million in penalties, in addition to requiring a number of steps to increase transparency, according to an announcement from the Office of the Attorney General (AGO).
“This resolution makes clear that those trading virtual currencies in New York state who think they can avoid our laws cannot and will not,” said New York State Attorney General Letitia James.
No finding that Tether ever issued without backing or to impact crypto prices. This settlement shows our commitment to the future of the industry, and to transparency with quarterly disclosures of @tether_to reserves going forward. 2/3
— Tether (@Tether_to) February 23, 2021
Tether (USDT) Settlement Details
The settlement comes after an investigation by the OAG found that iFinex, the operator of Bitfinex, and Tether made false statements about the backing of the “tether” stablecoin, and about the movement of hundreds of millions of dollars between the two companies. The STABLE Act was introduced in the United States Congress last year, which if enacted could have dire effects on stablecoins like Tether.
According to an announcement from Tether, the settlement resolves allegations about public disclosures related to a loan Tether made to Bitfinex when the exchange was encountering challenges accessing approximately $850 million in funds held by a payment processor in 2018. In it are proposed additional reporting requirements for the Federal Reserve.
Tether announced in a tweet:
“Under the terms of the settlement, we admit no wrongdoing, the settlement amount we have agreed to pay to the Attorney General’s Office should be viewed as a measure of our desire to put this matter behind us and focus on our business”
Growing List of Issues
The central bank then has control over them and severely limits their open usage. Last year, the STABLE Act was introduced in the U.S. Congress, which, if enacted, could be devastating for Tether and other stablecoins.
The act calls for banking licenses for stablecoin issuers such as USDT. In the following sentence, . In securing the settlement, Stablecoin Tether and cryptocurrency exchange Bitfinex must cease any further trading activity with New Yorkers, pay $18.5 million, and take a number of steps to increase transparency.This announcement came from the New York State Attorney General's Office.
Another proposal may require stablecoin issuers to store their reserves directly at the Federal Reserve. In the future, we will be transparent about @tether_to reserves by making quarterly disclosures. The settlement follows an investigation by the OAG, which found that iFinex, the operator of Bitfinex, and Tether made false statements about the backing of “tether” and about the flow of millions of dollars between the two companies.
