Tether and its subsidiary Bitfinex crypto exchange $41 million and $1.5 million, respectively, by the CFTC.
According to the CFTC indictment, the company that created the world’s most popular stablecoin, backed by the US dollar, provided “misleading assurances” about adequately backing its token with US dollars. Tether relied on uncontrolled entities and third parties to operate cash disguised as the firm’s reserves rather than enduring total reserves of its USDT stablecoin.
Bitfinex, for its part, was accused of offering futures contracts to platform users without first registering with the local government. Furthermore, the department reported that the heads of the cryptocurrency exchange engaged in over-the-counter transactions with American residents despite not having the necessary authority. The company will be forced to devise and implement a solution to discourage illegal transactions in the marketplace to correct the mistakes.
The CFTC’s claims, according to Bitfinex General Counsel Stuart Hegner, correspond to activities that occurred at significantly different time intervals, and Tether regularly kept enough funds in its reserve and did not refuse redemption requests. According to him, the CFTC order is incorrect because the agency recognized Tether’s claims as fully resolved in 2019, shortly after updating the company’s terms of service.
According to CFTC spokeswoman Dawn Stump, Consumers should be aware that the agency is not responsible for regulating every stablecoin that appears on the market. It is simply impossible, in her opinion, to keep track of each such token by carefully analyzing it and the actions of the issuing company.