On Friday, October 15, 2021, the US Commodity Futures Trading Commission (CFTC) announced that it had ordered Tether Holdings Limited and Ifinex Inc. , the parent company of Bitfinex, to pay fines totaling $42.5 million. The Commodity Futures Trading Commission (CFTC) accuses Tether of “making false or misleading statements and omitting a material fact in relation to the US dollar (USDT) stablecoin.”
Commodity Futures Trading Commission (CFTC) Issues Two Fines for Binding and Bitfinex, CFTC Expects ‘Honesty and Transparency in Digital Asset Market Development’
Stablecoin issuer Tether and Ifinex have been charged by the US Commodity Futures Trading Commission (CFTC) and the two companies have been ordered to pay $42.5 million. Tether is accused of “making false or misleading statements and omissions” regarding the company’s issue of stablecoin.
The US regulator also alleges that cryptocurrency exchange Bitfinex “has engaged in illegal OTC retail commodity transactions in digital assets with US persons on the Bitfinex trading platform and acts as a Futures Commission Dealer (FCM) without registration as required.”
“This case highlights the expectations of honesty and transparency in the fast-growing and evolving digital asset market,” Acting CFTC Chairman Rustin Behnam explained on Friday. “The CFTC will continue to take decisive action to highlight incorrect or misleading statements affecting the CFTC’s judicial markets.”
In the past, Tether and Bitfinex had problems with the New York Attorney General’s Office (NYAG), but this year they reached a settlement. At the time, New York Attorney General Letitia James announced in a statement:
Bitfinex and Tether recklessly and illegally covered massive financial losses to keep their scheme going and protect their bottom line. Tether’s claims that its virtual currency is fully backed by the US dollar has at all times been a lie. These companies hid the real risks faced by investors and were run by unauthorized and unregulated individuals and entities dealing in the darkest corners of the financial system.
The CFTC’s acting director of enforcement says the aim of the regulation is to “promote market integrity and protect US customers.”
Bitfinex and Tether eventually settled with NYAG in late February 2021, and the two companies were forced to pay a fine of $18.5 million. Vincent McGonagall, acting director of CFTC Enforcement, says the latest news regarding CFTC fines against the two crypto companies shows the regulator is committed to promoting integrity.
“As evidenced by today’s actions against Tether and Bitfinex, the CFTC is committed to carrying out its legal mission to promote market integrity and protect US customers,” McGonagle said in a press release. The Acting Director of Execution at the CFTC added:
The CFTC will use its strong authority to enforce anti-fraud laws on commodities, including digital assets, when necessary. The CFTC will also ensure that margined, leveraged or funded digital assets offered to US retail clients are traded on properly registered and regulated exchanges. Moreover, as Bitfinex’s request reflects, the CFTC will take decisive action against those who choose to violate the CFTC’s orders.
Meanwhile, cryptocurrency markets were intrigued by rumors of a Bitcoin Exchange Traded Fund (ETF) getting the green light from regulators. So much so, that the cryptocurrency markets didn’t hold back even when CFTC news on Tether and Bitfinex fell on Friday afternoon.
In a simultaneous statement, the commissioner of the Commodity Futures Trading Commission Down de Stamp He said, “I agree with the commission’s findings” regarding the fines imposed on Tether and Bitfinex. “Settlement with respondents to Tether found that there were misrepresentations regarding the assets backing Tether, specifically that the USDT tokens were backed 1 to 1 by the USD. Evidence proves that this assertion given to the customer hook was not 100% correct, 100% % of the time. When reviewing this record, it is clear to me that a wrongdoing has occurred, and that someone should be held responsible,” Stump added.
What do you think of the CFTC fining Tether and Bitfinex $42.5 million? Tell us what you think about it in the comments section below.
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