CFTC fined Tether and Bitfinex $42.5 million
CFTC has fined Tether and its subsidiary Bitfinex crypto exchange $41 million and $1.5 million, respectively.
The CFTC indictment notes that the company that created the world's most popular stablecoin, upheld by the US dollar, produced “misleading assurances” about sufficiently backing its token with US dollars. The organization noted that rather than enduring total reserves of its USDT stablecoin, Tether relied on uncontrolled entities and third parties to operate cash passed off as the firm's own reserves.
Bitfinex, in turn, was accused of providing futures contracts to platform users without first going through mandatory registration with the local government. In addition, the department reported that the heads of the cryptocurrency exchange entered into over-the-counter transactions with American residents without having the appropriate authority to do so. To fix the errors, the company will be forced to come up with and integrate a solution to discourage illicit transactions in the marketplace.
Bitfinex General Counsel Stuart Hegner stated the CFTC's claims correlate to activities that happened “at considerably separate time intervals,” adding that Tether regularly kept “enough funds in its reserve” and did not refuse redemption requests. According to him, the CFTC order is inaccurate, since back in 2019, the agency recognized the claims against Tether as fully resolved, shortly after updating the company's terms of service.
On the subject of supplies, Hegner clarified that there is never any evidence that USDT wasn't completely supported. It's just that they were all the time on the Tether bank account of the same name and were not kept in cash.
CFTC spokeswoman Dawn Stump said consumers should be aware that there is no agency responsibility to regulate every stablecoin that appears on the market. In her opinion, it is simply impossible to keep track of each such token by carefully analyzing it and the actions of the issuing company.
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