Crypto firms Tether and Bitfinex have reached a settlement with the New York Attorney General’s (NYAG) Office over a controversial case that began in April 2019.
As part of the settlement, both firms must discontinue any trading activity with New York citizens and are also required to provide quarterly reports and public disclosures on core business functions. Finally, the firms are required to pay $18.5 million (£13.1m) in penalties to the NYAG.
In April 2019, the NYAG’s office alleged that Bitfinex used Tether’s funds to secretly cover $850m (£604m) lost to payment processor Crypto Capital. The lost funds had supposedly caused withdrawal issues for Bitfinex’s customers in late 2018.
Bitfinex at the time claimed not to have lost the money but that Crypto Capital’s funds had been seized by government authorities in the USA, Poland, and Portugal. Bitfinex has been attempting to recover those funds ever since.
As part of today’s settlement, Bitfinex and Tether admitted to no wrongdoing. ‘Contrary to online speculation, there was no finding that Tether ever issued tethers without backing, or to manipulate crypto prices,’ reads a statement from the stablecoin firm.
‘We share the Attorney General’s goal of increasing transparency. For that reason, last year we voluntarily provided the Attorney General with information about the composition of Tether’s reserves, and we proposed that… we would disclose… additional information about Tether’s reserves. We do not make this commitment reluctantly; we embrace it,’ the statement adds.
The NYAG has also acknowledged Bitfinex’s recent loan repayment to Tether. Earlier this month, Bitfinex announced that it repaid Tether their remaining loan balance of $550 million in January and closed the credit line.
With this settlement, the long-running legal dispute facing these two firms has finally ended. Bitfinex and Tether say that in total they provided more than 2.5 million pages of documentation to the NYAG’s office in their cooperation.
Photo by Chris Barbalis on Unsplash
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