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New York attorney general’s $850 million Tether, Bitfinex investigation ends in $18.5 million settlement

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The owner of the Bitfinex trading platform and Tether cryptocurrency has agreed to pay $18.5 million in fine as part of a settlement from charges that it commingled client and corporate funds to conceal $850 million that went missing, New York Attorney General’s office disclosed on Tuesday.

Attorney General Letitia James said the settlement formally puts closure to the closely watched legal case that started in April 2019.

Tether, a stablecoin that is attached to the US currency, has been under scrutiny for over four years as a result of rumors that suggested the coin was not entirely supported by the greenback, and that it was involved in manipulating the price of bitcoin (BTC) in the 2017 bull market.

However, as previously mentioned to Coin Rivet, Tether and Bitfinex chief technology officer Paolo Ardoino junked those rumors, pointing out there was strong proof to the contrary.

Banned from offering services to New York residents

The settlement with NYAG includes a condition that prohibits Tether and Bitfinex from offering services to New York residents, while the arrangement also affirms that the company must be transparent by providing audits.

Bitfinex was alleged to have sent $850 million to Crypto Capital Corp, a payment processor believed to be operating in Panama, without the knowledge of clients, and after the money could no longer be accounted for, subtracting around $700 million from Tether’s reserves.

Admitting to no wrongdoing

“Tether and Bitfinex unlawfully covered up massive financial losses to keep their scheme going and protect their bottom lines,” CoinDesk quoted the attorney general as saying. “Tether’s claims that its virtual currency was fully supported by U.S. dollars was a lie,” she added.

Bitcoin’s price immediately climbed from a low of $45,800 to $49,000, dispelling worries over the continuation of a correction that has occurred in the last 48 hours. As recently as Sunday, BTC had soared to a new record peak past the $58,000 level.

“After 2.5 years and 2.5 million pages of information shared, we admit to no wrongdoing and will pay $18.5 million to resolve this matter,” Bitfinex said in a Twitter post.

Featured image by Sora Shimazaki/Pexels

The post New York attorney general’s $850 million Tether, Bitfinex investigation ends in $18.5 million settlement appeared first on BitcoinerX.

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Source: https://bitcoinerx.com/bitcoin/new-york-attorney-generals-850-million-tether-bitfinex-investigation-ends-in-18-5-million-settlement/

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