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Tether Will Pay $41 Million for Alleged Misleading Claims That Its Crypto Token Was Fully Backed by US Dollar Reserves

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Cryptocurrency Tether and crypto exchange Bitfinex will pay $42.5 million (about Rs 318.4 crore) to the US Commodity Futures Trading Commission (CFTC) to settle civil fees for allegedly making misleading statements and conducting illegal transactions.

Firms trading as Tether have agreed to pay $41 million (approximately Rs 307.2 crore) to settle CFTC fees, the CFTC said in a statement on Friday. Made misleading claims. According to the regulator, several times, from June 2016 to the end of February 2019, Tether made misleading or untrue statements about whether it had enough USD reserves to fully back its USD-denominated Tether token. Tether price in India on 16 October at 4:32 PM IST was Rs. 78.6.

In a separate order, firms trading as Bitfinex agreed to pay a fine of $1.5 million (about Rs 11.2 crore) on charges that prevented US customers from illegally engaging in retail commodity transactions on the exchange. were not sufficient. The CFTC said it violated US law and entered into a 2016 settlement with Bitfinex on similar allegations.

Neither Tether or Bitfinex, controlled by the same parent company, accepted nor denied the findings.

In a statement on its website, Tether challenged the CFTC’s statements, saying that the agency’s conclusion was that Tether’s dollar reserves in Tether’s name bank accounts were not in cash at all times, but that the tokens were entirely in cash. were not supported.

CFTC Commissioner Don Stump, a Republican, confirmed the agency’s findings that “the assurances provided to Tether customers were not true 100 percent of the time, 100 percent of the time” and that “misconduct occurred,” according to a statement published with the CFTC’s orders. “.

However, Stump raised concerns that the resolution – the first time the CFTC has applied the definition of a “commodity” to a stablecoin – would lead to confusion among cryptocurrency firms and investors.

© Thomson Reuters 2021


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