Crypto firms Tether, Bitfinex to pay USD42.5M to settle US CFTC charges

CNA – Cryptocurrency Tether and crypto exchange Bitfinex will pay USD42.5 million to settle civil charges from the US Commodity Futures Trading Commission (CFTC) over allegedly making misleading statements and making illegal transactions.

Firms doing business as Tether agreed to pay USD41 million to resolve CFTC charges they made misleading claims about Tether’s cryptocurrency stablecoin, the CFTC said in a statement on Friday. According to the regulator, at various times from June 2016 to late February 2019, Tether made misleading or untrue statements about whether it held sufficient US dollar reserves to fully back up its US dollar tether token.

In a separate order, firms doing business as Bitfinex agreed to a USD1.5-million penalty over charges their controls were not adequate to keep United States (US) customers from illegally engaging in retail commodity transactions on the exchange. This violated US law and a 2016 settlement with Bitfinex over similar allegations, the CFTC said.

Neither Tether or Bitfinex, which are controlled by the same parent company, admitted nor denied the findings.

In a statement on its website, Tether challenged the CFTC’s statements, saying the agency’s findings were that Tether’s dollar reserves were not all in cash in a bank account titled in Tether’s name at all times, rather than that the tokens were not fully backed.

Signage outside of the US Commodity Futures Trading Commission in Washington DC. PHOTO: CNA