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todayonline - 7 days ago

Bitfinex, Tether owner pays $18.5 mln fine to settle NYAG cryptocurrency cover-up charges

NEW YORK, Feb 23 - The owner of the Tether cryptocurrency and Bitfinex trading platform will pay an $18.5 million fine to settle charges it commingled client and corporate funds to cover up $850 million that went missing, New York Attorney General Letitia James said on Tuesday. James said the civil settlement with Hong Kong-based iFinex Inc and related entities will also require them to halt trading activity with New Yorkers. Bitfinex was accused of having sent the $850 million to Crypto Capital Corp, a payment processor believed to be in Panama, without telling clients, and after the funds went missing, draining at least $700 million from Tether s reserves. James said the diversion broke Tether s public promise to investors that its currency had been backed one-to-one by U.S. dollars, a practice she said had begun in 2017. These companies obscured the true risk investors faced, James said in a statement. Tether is the world s third-largest cryptocurrency, after Bitcoin and Ethereum, according to CoinMarketCap. Its market value was about $34.8 billion on Tuesday, up from $2.8 billion when James announced her charges in April 2019. Bitfinex and Tether did not admit or deny wrongdoing in agreeing to settle. In a statement, they said the funds in question had been fully repaid with interest, and never impacted Tether s ability to process redemptions. The Attorney General s Office concluded, in essence, that we could have done better in publicly disclosing these events, Bitfinex and Tether said. Contrary to online speculation, after 2-1/2 years there was no finding that Tether ever issued tethers without backing, or to manipulate crypto prices. REUTERS


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