Cryptocurrency exchange Bitfinex and its subsidiary Tether, which leads the USDT stablecoin, set a deal with the New York Attorney General’s Office to cancel an amount that circles$ 18.5 million. The exchange happened after two years, in a time that both companies received accusations of illegally offering services, covering up operations, and covering the truth about the backing of the cryptocurrency.
Tether clarified that neither they nor Bitfinex admitted any fault and that the penalty payment shows their desire to put that matter behind and start anew. Regarding the alleged issuance of USDT without backing, the company said it found no evidence on the subject and the suspected manipulation of cryptocurrencies’ prices.
Tether said in a statement that the settlement resolves allegations about a loan that Tether made to Bitfinex when Bitfinex encountered challenges in accessing approximately $ 850 million in funds held by a payment processor in 2018. These developments are well known. The loan serves as a guarantee to the continuity of Bitfinex clients.
According to Tether, the loan has already been prepaid with interest and without affecting its ability to process exchanges. In the document, the company stated about the nature of that prosecution’s, saying that call should have made a better public disclosure about what happened.
Tether expressed its gratitude to the prosecution staff for their “cooperation and professionalism.” At the same time, Bitfinex posted on its Twitter account that the “agreement shows our commitment to the future of the industry.”
To serve as providers of more precise information about their operations to investigators, Bitfinex and Tether handed over more than two million documents to authorities in January. The Attorney General of the State of New York (NYSAG) was the individual requesting the data.
Prosecutor’s Office and its confrontation against Bitfinex and Tether
There is no conciliatory tone from the New York Attorney General’s Office and the prosecutor Letitia James. Her position is quite contrary to both companies’. In the prosecution statement, the judicial process intends to stop the fraudulent and deceptive activities of Bitfinex in New York. Also, there is a situation with 850 million dollars in losses that might be undercovered worldwide.
The entity highlighted Tether did not have access to banking and had no way to demonstrate the support of the stablecoin Tether back in 2017. Besides, a series of bank transfers shows that the prosecution aims at Tether’s legitimacy to verify the funds.
Tether is currently working with a capitalization that surpasses 34 billion dollars. According to CoinGecko records, the capitalization is around $ 35.8 billion. This capitalization ranks Tether as an important cryptocurrency behind bitcoin, ether, and Binance Coin.
Back in April 2019, prosecutor James accused them of trading securities in New York without permission. The prosecutor even brought to light 28 pieces of evidence against both companies.
By: Jenson Nuñez