Bhushan is a FinTech enthusiast and holds a good flair in understanding financial markets. His interest in economics and finance draw his attention towards the new emerging Blockchain Technology and Cryptocurrency markets. He is continuously in a learning process and keeps himself motivated by sharing his acquired knowledge. In free time he reads thriller fictions novels and sometimes explore his culinary skills.
The two-year legal court battle has finally come to a conclusion with Bitfinex and Tether paying the settlement thereby putting this matter behind.
On Tuesday, February 23, iFinex, the parent firm of Bitfinex and Tether officially announced a settlement of the legal proceedings with the New York Attorney General’s (NYAG) Office. Back in 2018, NYAG accused Bitfinex of misappropriating $850 million worth of funds and later covering up by issuing Tether’s USDT stablecoins.
The two-year legal battle finally comes to an end with Tether agreeing to pay $18.5 million in a penalty to NYAG. However, the attorney general’s office said that Bitfinex and Tether will have to cease trading activity with New Yorkers. Besides, they will also have to submit quarterly transparency reports.
— Tether (@Tether_to) February 23, 2021
In the announcement, Tether has claimed no wrongdoing. It noted:
“No finding that Tether ever issued without backing or to impact crypto prices. This settlement shows our commitment to the future of the industry, and to transparency with quarterly disclosures of @tether_to reserves going forward”.
NYAG’s Letitia James Lashes Out on Bitfinex
while both parties have reached an agreement, it is likely that NYAG will bring no further charges on Tether. NYAG’s Letitia James doesn’t look satisfied with the recent outcome. In the recent press release on Tuesday, February 23, James said:
“Bitfinex and Tether recklessly and unlawfully covered-up massive financial losses to keep their scheme going and protect their bottom lines. Tether’s claims that its virtual currency was fully backed by U.S. dollars at all times was a lie. These companies obscured the true risk investors faced and were operated by unlicensed and unregulated individuals and entities dealing in the darkest corners of the financial system”
However, James has welcomed the verdict stating that any company trading virtual currencies in New York can’t bypass the law. But Charles Michael has come in defense of the two companies. He said that the settlement “resolves allegations about public disclosures”. He further added:
“To the Attorney General’s office’s credit, after two and a half years of investigation, [its] findings are limited only to the nature and timing of certain disclosures,” Michael said. “And contrary to online speculation, there was no finding that Tether ever issued tethers without backing or to manipulate crypto prices.”
This is first-of-its-kind settlement in the crypto space. The Bifinex and Tether case study will certainly serve as a benchmark for lawmakers ahead to design crypto regulations.