Blow to Bitcoin Haters as Tether and Bitfinex Settle with New York Attorney General

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Tue, 02/23/2021 - 12:59
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Alex Dovbnya
We can finally say goodbye to Tether-related conspiracy theories
Blow to Bitcoin Haters as Tether and Bitfinex Settle with New York Attorney General
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New York Attorney General Letitia James made an announcement Tuesday about reaching a settlement agreement with iFinex, the parent company of Bitfinex, and Tether, which is putting an end to a 22-month legal battle.

On top of paying an $18.5 million fine, the two affiliated companies have been prohibited from conducting any trading activities in the state of New York:

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...[...]This week, we’re taking action to end Bitfinex and Tether’s illegal activities in New York. These legal actions send a clear message that we will stand up to corporate greed whether it comes out of a traditional bank, a virtual currency trading platform, or any other type of financial institution.

Bitfinex and Tether have not admitted to any wrongdoings.

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"Tether truthers" in disbelief

As reported by U.Today, the New York AG sued Bitfinex back in April 2019, temporarily crashing the cryptocurrency market. James was accusing Tether of loaning $850 million to the affiliated exchange to cover up its loss related to failed payments provider Crypto Capital.

The lawsuit added more fuel to the long-running conspiracy theory about Tether creating its tokens out of thin air to manipulate the Bitcoin marketbecoming one of the inexhaustible sources of fear, uncertainly and doubt (FUD) in the industry. These baseless allegations had been actively pushed by some of the more outspoken cryptocurrency critics, including Nobel laureate Nouriel Roubini.

Tether lawyer Charles Michael revealed that the information about the stablecoin issuer's reserves was disclosed on a voluntary basis:

We proposed that as part of the settlement agreement, we would discloseboth to the Attorney General's Office and to the publicadditional information about Tether’s reserves on a quarterly basis.

In its statement, Tether announces that the AG's office has not found any evidence of USDT tokens not being backed by Tether's dollar reserves:

Contrary to online speculation, after two and half years there was no finding that Tether ever issued tethers without backing, or to manipulate crypto prices.

Bitcoin soared over 7.6 percent on the Bitstamp exchange in mere minutes once the settlement was made public.

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About the author

Alex Dovbnya (aka AlexMorris) is a cryptocurrency expert, trader and journalist with extensive experience of covering everything related to the burgeoning industry — from price analysis to Blockchain disruption. Alex authored more than 1,000 stories for U.Today, CryptoComes and other fintech media outlets. He’s particularly interested in regulatory trends around the globe that are shaping the future of digital assets, can be contacted at alex.dovbnya@u.today.