CFTC Fines Stablecoin Issuer Tether and Crypto Exchange Bitfinex $42.5 Million
On Friday, October 15, 2021, the U.S. Commodity Futures Trading Commission (CFTC) announced that it had ordered the company Tether Holdings Limited and Ifinex Inc., the parent company of Bitfinex, to pay fines totaling $42.5 million. The CFTC accuses Tether of “making untrue or misleading statements and omissions of material fact in connection with the U.S. dollar tether token (USDT) stablecoin.” CFTC Issues Two Fines to Tether and Bitfinex, CFTC Expects ‘Honesty and Transparency in the Developing Digital Assets Marketplace’
The stablecoin issuer Tether and Ifinex have been charged by the U.S. Commodity Futures Trading Commission (CFTC) and the two firms have been ordered to pay $42.5 million. Tether is accused of “making untrue or misleading statements and omissions” in regards to the stablecoin the firm issues.
The U.S. regulator also claims that the crypto exchange Bitfinex “engaged in illegal, off-exchange retail commodity transactions in digital assets with U.S persons on the Bitfinex trading platform and operated as a futures commission merchant (FCM) without registering as required.”
“This case highlights the expectation of honesty and transparency in the rapidly growing and developing digital assets marketplace,” the acting CFTC chairman Rostin Behnam explained on Friday. “The CFTC will continue to take decisive action to bring to light untrue or misleading statements that impact CFTC jurisdictional markets.”
In the past, Tether and Bitfinex had issues with the New York Attorney General’s Office (NYAG), but reached a settlement this year. At the time, New York Attorney General Letitia James declared in a statement: 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. CFTC’s Acting Director of Enforcement Says Regulation Is Meant to ‘Promote Market Integrity and Protect US Customers’
Bitfinex and Tether eventually settled with the NYAG in late February 2021, and the firms had to pay an $18.5 million fine. The acting director of CFTC enforcement, Vincent McGonagle, says the latest news concerning the CFTC’s fines against the two crypto companies shows the regulator is committed to promoting integrity.
“As demonstrated by today’s actions against Tether and Bitfinex, the CFTC is committed to carrying out its statutory charge to promote market integrity and protect U.S. customers,” McGonagle said in a press statement. The CFTC’s acting director of enforcement further added: The CFTC will use its strong anti-fraud enforcement authority over commodities, including digital assets, when necessary. The CFTC will also act to ensure that certain margined, leveraged or financed digital asset trading offered to retail U.S. customers must occur on properly registered and regulated exchanges. Moreover, as the Bitfinex order reflects, the CFTC will take decisive action against those who choose to violate CFTC orders.
Meanwhile, crypto markets have been enthralled by the rumors of a bitcoin exchange-traded fund (ETF) getting the green light from regulators. So much so that crypto markets did not even flinch when the CFTC’s news about Tether and Bitfinex dropped on Friday afternoon.
In a concurring statement, CFTC commissioner Dawn D. Stump said: “I agree with the Commission’s findings” concerning the fines against Tether and Bitfinex. “The settlement with the Tether respondents finds that there were misrepresentations regarding the assets backing tether, specifically that the USDT tokens were backed 1-to-1 by US dollars. The evidence establishes that this assurance provided to tether customers was not 100% true, 100% of the time. When reviewing this record, it is clear to me that wrongdoing occurred, and that someone should be held accountable,” Stump added.
What do you think about the CFTC fining Tether and Bitfinex $42.5 million? Let us know what you think about this subject in the comments section below. ETC Group Releases Bitcoin Cash Report Praising High Usage and Vibrant Development NEWS | 12 hours ago Payments Giant Visa Launches NFT Program to Support Digital Artists NEWS | 14 hours ago Tags in this story $42.5 Million, acting CFTC chairman, BitFinex, CFTC, CFTC jurisdictional markets, crypto assets, Digital Currency, Fine, ifinex, Leticia James, Markets, New York Attorney General, NYAG, Regulation, Rostin Behnam, Stablecoin, Tether, Tether (USDT), Tether Bitfinex, USDT, Vincent McGonagle
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