USDT stablecoin issuer Tether to pay $ 18.5 million fine due to false information on the company’s reserves
The parent company of the Bitfinex crypto exchange, iFinex, and the issuer of the USDT stablecoin, Tether, will pay a $ 18.5 million fine to New York authorities. This is reported by the New York State Attorney General (NYAG).
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The announcement claims that the prosecutor and Tether have reached an “agreement” with iFinex that will pay the companies a fine and increase transparency of financial statements. The announcement also says that the prosecutor’s office was able to establish the presence of “false” allegations from the two companies.
“Bitfinex and Tether recklessly and illegally covered huge financial losses in order to preserve their scheme and profits,” said Attorney General Laetitia James.
In addition, companies have reportedly made false claims about stablecoin reserves. Companies also made false claims to cover up the truth about Bitfinex’s massive losses, the regulator said.
Tether on the way to fix it
The Attorney General’s office found that in 2017 the USDT issuer “did not have access to banking operations anywhere in the world.” Thus, writes NYAG, Tether could not always confirm the presence of reserves, contrary to the statements of the issuer.
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To prove the company’s “good faith” behavior, the issuer of the largest stablecoin published an “audit” of its reserves in 2017. In reality, however, the money was credited to the company’s accounts only on the morning of the “audit” itself, NYAG stressed. Recall that at the time of this writing, the capitalization of USDT is more than $ 35 billion.
As part of the settlement, companies are required to report quarterly on the management of client and corporate bank accounts. In addition, Tether is also committed to disclosing any loans or receivables.
Read about what Bitfinex, Tether and US regulators did not share in a special material from BeInCrypto.
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