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| Tether pays $41 million for misleading claims |
Tether Limited, a stablecoin of the same name controlled by the owner of Bitfinex, has agreed to pay $41 million to clear allegations made by the US Commodity Futures Trading Commission (CFTC) that it made false or misleading statements when it claimed that its stablecoin was a fully legal tender.
In a statement, the CFTC said that between June 2016 and February 2019, Tether Limited misled clients and the cryptocurrency market by saying that it had sufficient US dollar reserves to support each token, but in reality its reserves were not full most of the time.
In addition, the CFTC said the company did not disclose the existence of unsecured and unsecured claims in its reserves. She falsely told investors that she was running routine checks to show she still had 100% of her reserves. Despite the fact that its reserves have not been checked.
“This case underscores the expectations of honesty and transparency in the fast-growing and evolving digital asset market,” Rustin Behnam, acting chair of the CFTC, said in a statement.
In February, the New York Attorney General and the Commodity Futures Trading Commission jointly investigated the company. As part of the settlement, the company was banned from doing business in the state of New York.
Tether misled customers, CFTC says
The company stated in the CFTC order that it has not had any problems with the company's ongoing operations. After the company updated its terms of use in February 2019, the agency's request issue has been resolved.
“In terms of reserves, there is no evidence that the tokens have not been fully secured at all times,” she added. The reserves are not all in cash, but always in bank accounts. We always kept adequate reserves and never missed restore requests.
Tether is known as a stable digital currency. It is usually covered in fiat currencies such as the US dollar or the euro. It is mainly used as a means of payment. They are considered more stable than other digital currencies because they are supported.
The Commodity Futures Trading Commission also announced that cryptocurrency platform Bitfinex has been fined $1.5 million for illegal retail transactions with Americans in the retail sale of digital assets. This is against the provisions of the 2016 CFTC Regulations.