Tether is paying $ 41 million for allegedly misleading claims that its crypto token was fully backed by US dollar reserves

Cryptocurrency Tether and Bitfinex crypto exchange will pay $ 42.5 million (approximately Rs 318.4 billion) to settle civil charges by the US Commodity Futures Trading Commission (CFTC) of allegedly misleading statements and illegal transactions.

Companies doing business as Tether agreed to pay $ 41 million (about Rs. 307.2 billion) to resolve the CFTC allegations and made misleading claims about Tether’s cryptocurrency stablecoin, the company said CFTC in a statement on Friday with. According to the regulator, from June 2016 to the end of February 2019, Tether made misleading or untrue statements at various times about whether it had sufficient US dollar reserves to fully secure its US dollar tether token. The tether price in India was Rs. 78.6 at 4:32 p.m. IST on October 16.

In a separate order, companies doing business as Bitfinex agreed to a fine of $ 1.5 million (approximately Rs 11.2 billion) for fees that they were inadequate to control to deter US customers to illegally conduct trade in commodities on the stock exchange. This violates US law and a settlement with Bitfinex in 2016 for similar allegations, the CFTC said.

Neither Tether nor Bitfinex, which are controlled by the same parent company, have admitted or denied the findings.

In a statement on its website, Tether questioned the CFTC’s statements, saying the agency’s findings were that Tether’s dollar reserves were not in cash at all times in a bank account called Tether’s name, but that the tokens were incomplete were covered.

CFTC Commissioner Dawn Stump, a Republican, confirmed the agency’s findings that the “assurance given to Tether customers was not 100 percent true” and that “wrongdoing has occurred,” according to a statement accompanying the CFTC orders has been published.

However, Stump expressed concerns that the resolution – the first time the CFTC has applied the definition of “commodity” to a stablecoin – would create confusion among cryptocurrency firms and investors.

© Thomson Reuters 2021

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