The cryptocurrency company iFinex Inc., which operates the Bitfinex exchange and the cryptocurrency Tether (USDT), has reached an agreement with the New York Attorney General’s Office (NYAG) over a lawsuit that began about two years ago. The USDT FUD thus ceased to be relevant.
The USDT scarecrow is over
Tether (USDT) is a stablecoin covered by the dollar, which we know was not always 100% covered by the dollar, but in terms of data there were data on coverage by other assets and receivables. In April 2019, a lawsuit filed by the New York Attorney General’s Office against iFinex Inc., which operates both Bitfinex and Stablecoin Tether. The allegations included a preliminary injunction prohibiting the company from budgeting USDT coverage. The prosecutor then said that according to the allegations, the Bitfinex exchange secretly covered the loss of USD 850 million through funds intended to cover Tether.
Now the court has ended with an agreement. IFinex Inc. does not admit any wrongdoing and has agreed to pay $ 18.5 million in fines in the settlement.
“Bitfinex and Tether have recklessly and illegally covered huge financial losses to keep their system running,” said Attorney General James.
Agreement with Bitfinex Exchange
The agreement ending the Tether USDT case states:
Today’s agreement requires Bitfinex and Tether to end any business with the New Yorkers. In addition, these companies must report regularly to the OAG to ensure compliance with this prohibition. In addition, companies must be required to report on their core business functions. In particular, Bitfinex exchange and Tether will need to report quarterly that they properly separate corporate and client accounts, including the separation of government and virtual currency business accounts by company executives, and will also be required to report mandatory asset transfers between Bitfinex and Tether entities.
In addition, Tether (USDT) must disclose the disclosure of insurance assets covering assets by category, including the disclosure of any loans or receivables from or from associates. The company will also ensure greater transparency and mandatory reporting regarding the use of non-bank “payment processors” or other entities used to transfer clients’ funds. Last but not least, Bitfinex and Tether will be required to pay a fine of $ 18.5 million to the State of New York.
Stuart Hoegner, Bitfinex and Tether’s chief attorney, said the amount of the settlement should be seen “as a measure of our desire to put the matter behind us and focus on our business.” The USDT and the whole FUD around it are definitely coming to an end. No more worries that one day a stablecoin Tether will pull the whole cryptocurrency market to hell…