CFTC fines Tether and Bitfinex $42.5M for Misleading Claims on USDT

​Fazzaco learned that, the US Commodity Futures Trading Commission (CFTC), the regulatory authority for US derivatives markets , had filed and settled charges against Tether and Bitfinex, fining a total civil monetary penalty of $42.5 million.

CFTC has charged against Tether Holdings Limited, Tether Limited, Tether Operations Limited, and Tether International Limited for making misleading or unstrue statements and omissons of material fact in connection with USDT stablecoin being allegedly backed by fiat US dollar. Tether was ordered to pay a civil monetary penalty of $41 million and to cease and desist from any further violations of the Commodity Exchange Act (CEA) and CFTC regulations.

Also, the CFTC filed and settled separate charges against iFinex Inc., BFXNA Inc., and BFXWW Inc. (d/b/a Bitfinex) in connection with their operation of the Bitfinex cryptocurrency trading platform. The authority found that Bitfinex is engaged in illegal, off-exchange retail commodity transactions in digital assets with US persons on the Bitfinex trading platform and operated as a futures commission merchant (FCM) without registering as required. As a result, Bitfinex should pay a $1.5 million civil monetary penalty.

“As to the Tether reserves, there is no finding that tether tokens were not fully backed at all times—simply that the reserves were not all in cash and all in a bank account titled in Tether’s name, at all times. As Tether represented in the Order, it has always maintained adequate reserves and has never failed to satisfy a redemption request. The CFTC’s findings regarding Bitfinex relate to the timing and implementation of its ban on US customers, and the CFTC’s Order makes no finding of a violation after December 2018.”Tether Operations Limited said in the statement.

The company behind USDT stablecoin also commented that they always showed a willingness to resolve this matter ‘in order to move forward and focus on the future.’

“As demonstrated by today’s actions against Tether and Bitfinex, the CFTC is committed to carrying out its statutory charge to promote market integrity and protect US customers,” Vincent McGonagle, CFTC’s Acting Director of Enforcement, commented.