The cryptocurrency exchange Bitfinex and Tether reached a settlement with the New York Attorney General’s Office (NYAG) over the company’s financial operations tied to an $850 million loss. According to the agency’s statement.
As part of the settlement, Bitfinex and Tether will pay $18.5 million to the state of New York. The companies did not admit wrongdoing.
No finding that Tether ever issued without backing or to impact crypto prices. This settlement shows our commitment to the future of the industry, and to transparency with quarterly disclosures of @tether_to reserves going forward. 2/3
— Bitfinex (@bitfinex) February 23, 2021
Tether also agreed to provide NYAG with reports on the backing of the stablecoin USDT. The agency acknowledged the repayment of Bitfinex’s debt to Tether.
“The Attorney General essentially concluded that we could have done a better job of reporting these events,” said Tether.
Attorney General Letitia James said that both companies “irresponsibly and unlawfully concealed enormous financial losses.”
“Tether’s claims that its digital asset was fully backed by US dollars were a lie. These companies concealed the true risk investors faced,” stressed the attorney general.
According to James, state authorities intend to stand up to “corporate greed” regardless of whether the company is tied to traditional finance or cryptocurrency.
In a comment to The Block, Stuart Hogner, the lawyer representing the companies, said the settlement amount should be viewed “as an expression of our desire to put this matter behind us.”
The companies’ general counsel, Jason Weinstein, said that the results of the investigation “are limited to the nature and timing of the disclosure of certain information.”
“Contrary to online speculation, there was no evidence of Tether issuing unbacked USDT or manipulating prices,” said in a joint statement by the companies.
The litigation had been ongoing since April 2019, when the NYAG accused Bitfinex of trying to conceal the $850 million loss using Tether’s reserves. The exchange disputed the claims.
The New York Supreme Court ordered Bitfinex to hand over documents relating to the loss of access to fiat funds. The company sought to challenge the ruling but lost on appeal.
In September 2020, the court ordered Bitfinex and Tether to transmit financial statements to the prosecutor’s office and extended the injunction on the transfer of funds.
Earlier, the NYAG asked the court to extend the deadline for providing documents. In January 2021, Tether’s chief technology officer Paolo Ardoino said that the company had prepared more than 2.5 million pages in response to the agency’s requests.
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2021.02.17 — Settlement Agreement — Execution Version.b-t Signed-c2 Oag Signed by ForkLog on Scribd