Tether, Bitfinex Settle Big Court battle in New York City
Crypto Broker – Mark
Tether and Bitfinex resolved their lawsuit with the New York Attorney General's Office. Both firms have decided to spend as much as $18.5 million to eventually bring an end to the conflicts of the past.
The Tether Bitfinex Scandal has come to a close
Both firms have been under serious scrutiny for the past two years after being convicted of working to conceal a $850 million deficit of both corporate and customer funds. As a part of the deal, both Tether and Bitfinex will no longer be allowed to do business in New York, nor will they be able to sell their services to citizens of the state.
Tether (USDT) is considered to be a leading stablecoin in the cryptocurrency markets. It is supposedly connected to the US dollar, which protects it from being exposed to market fluctuations and instability, making it safer to buy than BTC and Ethereum.
That being said, as per Attorney General Letitia James of New York, the firm has never kept any dollars on its reserve account. As a result, the asset was not backed by fiat. In addition, James also stated that the company did not have access to standard banking facilities throughout 2017 and eventually lied to customers about liquidity.
Bitfinex and Tether willfully and unfairly covered up huge financial losses to maintain their scheme and secure their end result. These companies masked the real danger consumers posed and was operated by unlicensed and unauthorized corporations working in the deepest corners of the financial sector.
The possibility of a cover-up first appeared in a filing in 2019. The Attorney General alleged that Bitfinex had turned over approximately $850 million to a firm called Crypto Capital in Panama. The movement of funds happened without the approval of the investors, and no one was informed that the money had been exchanged, which was a suspected violation of the company's protocols.
Attempting To Pass Forward
Although all individuals decided to settle the lawsuit, neither confessed to doing anything illegitimately. Both accepted, however, that accountability was the cornerstone to all future activities. In a tweet, Tether explained to users:
“We share the attorney general’s goal of increasing transparency. Contrary to online speculation, after two and a half years, there was no finding that Tether ever issued tethers without backing or to manipulate crypto prices.”