Bitfinex and Tether Fined $42.5 Million for Misleading Claims on USDT

The US Commodity Futures Trading Commission (CFTC) announced on Friday that it had filed and settled charges against Tether and Bitfinex, imposing a total civil monetary penalty of $42.5 million. According to the press release,  charges were brought against Tether Holdings Limited, Tether Limited, Tether Operations Limited, and Tether International Limited for their responsibility in making misleading statements about USDT stablecoin being allegedly backed by fiat US dollar.

That said, Tether was ordered to pay $41 million for such untrue claims. Also, the CFTC filed and settled separate charges against iFinex Inc., BFXNA Inc., and BFXWW Inc. (d/b/a Bitfinex) in connection with their operation of the Bitfinex crypto trading platform. The authority found that Bitfinex is engaged in illicit off-exchange retail commodity transactions with digital assets with US persons. As a result, Bitfinex should pay a $1.5 million civil monetary penalty.

Tether Response

In response to the CFTC decision, Tether Operations Limited issued the following statement: “As to the Tether reserves, there is no finding that tether tokens were not fully backed at all times—simply that the reserves were not all in cash and all in a bank account titled in Tether’s name, at all times. As Tether represented in the Order, it has always maintained adequate reserves and has never failed to satisfy a redemption request. The CFTC’s findings regarding Bitfinex relate to the timing and implementation of its ban on US customers, and the CFTC’s Order makes no finding of a violation after December 2018.”

The company behind USDT stablecoin also commented that they always showed a willingness to resolve this matter ‘in order to move forward and focus on the future.’

“As demonstrated by today’s actions against Tether and Bitfinex, the CFTC is committed to carrying out its statutory charge to promote market integrity and protect US customers,” Vincent McGonagle, CFTC’s Acting Director of Enforcement, commented.

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