Bitfinex & Tether [USDT] settled with the New York Attorney General office within the landmark case against Tether. NY authorities alleged that Tether misrepresented the degree to which Tether’s [USDT] coins were backed by fiat collateral.
The settlement requires Bitfinex and Tether to pay $18.5 Mln for damages to the New York State, as well as undergoing periodic reporting of their reserves. The terms of the settlement mandate Bitfinex and Tether to report their present reserve status and budge, any transaction between the 2 firms, & offering public reports for the precise composition of their cash and non-cash reserves. The reports will be submitted each quarter for the subsequent two years.
Additionally, the settlement also requires Bitfinex and Tether to prevent servicing users within the state of New York.
As reported earlier, the lawsuit by the NYAG alleged that Tethers weren’t fully backed by reserves at certain times. Moreover, Bitfinex is imagined to have opened a line of credit with Tether to repay an $850 Mln shortfall from the failure of its former partner, Cryptocurrency Capital Corp. The road of credit has since been closed, as reported by Tether and confirmed by the authorities. While the documents make specific claims on the status of Tether reserves in 2017 & 2018, the regulators didn’t seem to possess any issues with Tether’s reserve status in 2021.
The settlement fine of $18.5 Mln is by now a really small portion of all existing USDT, which is almost $35 Bln. A Tether spokesperson added that the firm is “pleased to possess reached a settlement of legal proceedings.” They explained:
“Under the terms of the settlement, we admit no wrongdoing. The settlement amount we’ve agreed to pay to the Attorney General’s Office should be viewed as a measure of our desire to place this matter behind us and specialize in our business. We are pleased that our users have shown loyalty and commitment to our businesses over the past two years, while this investigation was ongoing.”