Tether Fined $41 Million Dollars For Misleading Statements about Fiat Currency Banking

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Just recently, CFTC (Commodity Futures Trading Commission) released a statement claiming that Tether and Bitfinex would pay fines amounting to forty-two million dollars in total.

The commission charged Tether Holdings Ltd., Tether Operations Ltd, Tether International Ltd. and Tether Ltd with giving false statements. According to CFTC, the stablecoin lied about fiat currency backing up its tokens.

Therefore, the commission expects Tether to pay a whopping forty one million dollars while Bitfinex pays 1.5 million US dollars. In addition, the Commodities Futures Trading Commission is charging Bitfinex with illegal trading during the operation of the Bitfinex Crypto Trading platform and violating orders.

Bitfinex violated Part VII. A. of the Commodities Futures Trading Commission’s June 2, 2016 order.

The commission says that Bitfinex violated Part VII. A. of the Commodities Futures Trading Commission’s June 2, 2016 order.

According to the CFTC website, Bitfinex was also operating as a Futures Commission Merchant (FCM) without proper registrations.

Tether Went Against the CEA for Close to Three Years

The commission says it is committed to honest and transparent transactions in the rapidly growing digital marketplace. In a recent statement, the CFTC president Rostin Behnam added that the commission would work tirelessly to ensure they achieve this goal.

Vincent McGonagle, who is the current acting director, also added that the organization would do everything in its power to ensure the protection of customers in the United States. The commission also holds that each exchange needs to have undergone proper regulatory and registration processes.

To customers, the commission urges them to check the background of the companies to which they are committing and as a result avoid falling victim.

Additionally, the commission chose a team that will deal with these cases. They include;

  • Candy Haan
  • Bryan Hsueh
  • Elizabeth N. Pendleton
  • Cristina Covarrubias
  • Robert T. Howell
  • Benjamin Jackman
  • Ray Lavko
  • Scott R. Williamson

Additionally, CFTC’s former Enforcement workers would join the team. These workers include;

  • Michael Frisch
  • Jeffrey Gomberg
  • Brigitte C. Weyls
  • Susan Gradman

Bitfinex, the Crypto Exchange platform that controls Tether limited, just responded to the act by the commission.

The statement posted through their website urges everyone to put the past behind and focus on the future. Bitfinex started by saying that the CFTC didn’t find any issues with Tethers operations currently. Additionally, they feel that the team focused on matters that occurred more than two years ago.

Additionally, the team stated that they resolved these issues during the 2019 update that occurred in February.

To further explain the issue, the team wrote, 

“Following several years of investigation and access to extensive information about the companies and their operations, the CFTC has concluded its review. The CFTC’s Order found no issues relating to Tether’s current operations. In fact, the Order related to certain disclosures about the reserves from more than two and a half years ago. As the Order recognizes, these issues were fully resolved when the terms of service were updated in February 2019.”

Finally, the team concluded by saying that they agree with Tether to resolve this challenge and hope to continue earning their customers’ confidence. In addition, the company hopes to lead the Crypto industry transparently.
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