Per a press release, the U.S. Commodity Futures Trading Commission (CFTC) has disclosed that their review on Tether Holding Limited and other associated companies has concluded. As a result, Tether has agreed to pay a $41 million fine.
Related Reading | Breaking: Tether Executives Could Face Criminal Probe for Alleged Fraud
The Commission concluded that Tether made “untrue or misleading statements and omissions of facts in connection with” their U.S. dollar-backed stablecoin, USDT.
In addition to the fine, Tether has agreed to avoid future violations of the CFTC’s Commodity Exchange Act (CEA) and other regulations. The regulator found that “at least” June 1, 2016, to February 25, 2019, the company “misrepresented” its U.S. dollar reserves for USDT.
As the Commission clarified, today it also settles charges with iFinex Inc., BFXNA Inc., and BFXWW Inc. (Bitfinex) in relation to their operations with leading crypto exchange Bitfinex.
These orders also contemplate fines for Bitfinex due to their violation of the CEA. The regulators concluded that the company made “illegal, off-exchange retail commodity transactions” with U.S. citizens from March 1, 2016, to December 31, 2018.
Via these transactions, the company provided U.S. persons with access to crypto-based derivates products. Thus, Bitfinex operated as a futures commission merchant (FCM) “without registering as required”, according to the press release.
The company has been required to pay $1.5 million in fines and committed to introducing systems to stop U.S. persons from accessing “unlawful retain commodity transactions”.
Rostin Behnam, Acting CFTC Chairman, said that the case against Tether is an example of the requirements that the crypto industry needs to fulfill in terms of “honesty and transparency”. Behnam added:
The CFTC will continue to take decisive action to bring to light untrue or misleading statements that impact CFTC jurisdictional markets.
In addition, Acting Director of Enforcement Vincent McGonagle highlighted that the CFTC is “committed” to enforce its statutory charge to promote “market integrity” and protect consumers. McGonagle added:
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.
Tether Looks To The Future
Tether issued its own statement in response to its settlement with the CFTC. The company highlighted that the U.S. regulator was unable to found “issues relating to Tether’s current operations”.
Related Reading | Coinbase to List Tether On Pro Trading Platform
In addition, the company clarified that the Commission’s conclusions are related to their reserves from 2 years. Since that time, Tether has updated its terms of service.
Tether addressed the claims about their USDT reserves, a favorite topic amongst crypto detractors to support their argument against the industry:
(…) there is no finding that tether tokens were not fully backed at all times—simply that the reserves were not all in cash and all in a bank account titled in Tether’s name, at all times. As Tether represented in the Order, it has always maintained adequate reserves and has never failed to satisfy a redemption request.
In relation to the Bitfinex case, the company clarified that the CFTC found no violations of its regulations after December 2018 when it implemented a ban on U.S. persons gaining access to crypto derivatives.
Tether has agreed to settle the cases to “move forwards and focus on the future”. Many in the crypto community celebrate the conclusion of the cases, as they were used on multiple occasions to generate FUD in the market.
Related Reading | Sun Has Arrived: Tron’s Tether Has Issued 30 Billion USDT
At the time of writing, Bitcoin trades at $61,561 with a 7.4% profit in the daily chart.
