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Friday, 03 December, 2021

Tether, Crypto Exchange Bitfinex to Pay $42 Million for Violating Norms

Tether, a cryptocurrency, and Bitfinex, a cryptocurrency exchange, will pay $42.5 million to resolve civil charges brought by the US Commodity Futures Trading Commission (CFTC) for allegedly making false representations and transacting illegally. The CFTC stated in a statement on Friday that firms doing business as Tether agreed to pay $42 million to satisfy CFTC accusations that they made false statements regarding Tether's cryptocurrency stablecoin.

Tether made misleading or false claims regarding whether it had adequate US dollar reserves to properly back up its US dollar tether token at various points between June 2016 and late February 2019, according to the regulator. In a separate decision, Bitfinex-related companies agreed to pay a $1.5 million fine over allegations that its controls were insufficient to prevent US consumers from participating in unlawful retail commodities transactions on the exchange.

According to the CFTC, this breached US law and a 2016 deal with Bitfinex over identical claims. The results were not acknowledged nor disputed by Tether or Bitfinex, which are both owned by the same parent corporation. Tether responded to the CFTC's claims on its website, claiming that the agency's findings were that Tether's dollar reserves were not always in cash in a bank account labeled in Tether's name, rather than that the tokens were not completely supported.

CFTC Commissioner Dawn Stump, a Republican, reiterated the agency's conclusions that the assurance offered to tether clients was not 100 percent truthful, 100 percent of the time" and that wrongdoing occurred as per a statement released with the CFTC orders.



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