Crypto, Tether and Bitfinex have finally reached an agreement with the New York attorney general's office to pay a $ 18.5 million fine as a solution to the ongoing issue since 2019.
For the record, the top law enforcement has investigated both Ifinex-owned firms following hundreds of millions of dollars in transfer charges to cover the loss of $ 850 million in clients and corporate funds.
Tether and Bitfinex are also asked to stop trading activities with the New York community and submit transparent reports on a quarterly basis.
Tether is a firm that develops stablecoin, Tether (USDT) based on US dollars. As a result of its status as a token pursued to obtain other cryptocurrencies, the question arises as to whether Tether has sufficient cash savings to accommodate tether tokens in the cycle. Critics are also worried if Tether tokens are used to manipulate bitcoin prices despite Tether's denial.
According to the attorney general's office, Letitia James: 1 / Sometimes Tether does not have any savings to cover its tokens, 2 / In mid-2017, Tether did not have access to banking and invited client misunderstandings on liquidity issues, 3 / Filing in 2019 revealed Bitfinex handed over $ 850 million to a Panama entity known as Crypto Capital without informing its investors, 4 / Bitfinex and Tether were accused of being involved in a series of transactions that exposed Tether's cash reserves to Bitfinex.
The actions of the two firms are clearly illegal because they want to cover huge losses in order to protect their interests. James explained that Tether's allegation that his token, which was based on the US dollar, was a fraud.
"Both have obscured the real risks faced by investors and, handled by unlicensed individuals and entities."
However, both firms refused to plead guilty and at the same time agreed to be more transparent.
As of early February, Bitfinex had paid off a $ 550 million loan to Tether.
