End of judicial soap opera for Tether: $ 18.5 million fine, life goes on for the king of Bitcoin

USDT on the grill – The Tether-Bitfinex case and New York Attorney General’s Office (NYAG) charges date back to April 2019 . Accused of arranging with their stablecoin USDT, the sister companies of the iFinex group have finally agreed to pay a fine and can no longer have activities of any kind in New York (city like state).

The NYAG does not appreciate „small arrangements“ between friends

This is a press release issued on February 23 that the Office of the Attorney General of New York, Letitia James , announced that it ended „illegal activities“ of the exchange platform Bitfinex in New York.

The dispute between the NYAG and Bitfinex started because of Tether’s $ 850 million USDT loan to the crypto exchange. This payment facility between sister companies was intended to cover the huge hole in the cash flow caused by the legal troubles of the Bitcoin System payment processor of the time, Crypto Capital , then accused of practicing shadow banking .

“Bitfinex and Tether irresponsibly and illegally hedged massive financial losses to maintain their system and protect their bottom line (…) Tether’s claims that its digital currency was fully backed by US dollars at all times was a lie (…) ) “

After 2 years of procrastination and passing of arms, the Attorney General of New York and the 2 companies of the iFinex group have reached a common agreement .

While Bitfinex and Tether do not acknowledge the NYAG charges, the companies agree to pay New York State $ 18.5 million in penalties to quash these protracted lawsuits.

No 100% dollar reserves for USDT? No problem

According to Stuart Hoegner , general counsel for Bitfinex and Tether cited by The Block, the present arrangement with the NYAG and the payment of these penalties are to be taken “as a manifestation of our willingness to put this matter behind us, and to focus on the heart of our business ” .

In addition, Bitfinex and Tether will have to end all of their activities in New York City and State. Compliance with this ban will be the subject of reports that the 2 companies must submit regularly to the NYAG.

In particular, Bitfinex and Tether will have to report, on a quarterly basis, that they correctly separate the accounts of companies and customers. They will also have to submit to mandatory reports concerning transfers of assets between the entities of the iFinex group.

Regarding Tether, the company will need to publish regular reports on the assets and reserves that support its USDT stablecoin.