CFTC fines $ 41 million for unclear and unaudited reserves

Tether, the leading issuer of stablecoin USDT, was fined $ 41 million by the Commodity Futures Trading Commission (CFTC) as part of the settlement.

The company allegedly violated the Commodity Exchange Act (CEA) by making misleading claims that the USDT stablecoin was 1: 1 covered by US dollars.

Despite claims that the stablecoin is fully pegged to the value of the greenback, the order claims that Tether has enough reserves of less than a third over a period of 26 months (2016 to 2018). Tether also did not conduct a professional review during the above period.

The order also shows that Tether did not disclose the addition of unsecured debts and non-fiat assets to its reserves. In addition, Tether has falsely stated that they will undergo regular professional audits to prove they hold “100% reserves” when their reserves are not.

The CFTC also fined iFinex, the parent company of the Bitfinex exchange, fined $ 1.5 million for conducting retail forex trading transactions.

Acting Director of Enforcement Vincent McGonagle says these actions are designed to promote market integrity:

“As today’s actions against Tether and Bitfinex have shown, the CFTC is committed to enforcing the law to promote market integrity and protect US customers.”

Tether and Bitfinex CTO Paolo Ardoino sounded optimistic in his tweet, claiming that companies could finally be relieved of the investigation burden.

In an official statement, Tether said the CFTC had found nothing suspicious in the company’s current operations.

“The CFTC assignment did not reveal any issues related to Tether’s current activity. In fact, the contract includes multiple disclosures of reserves from more than two and a half years ago. These issues were fully resolved when the Terms of Use were updated in February 2019. “

In February of that year, Tether also paid a $ 18.5 million fine to New York Attorney General Letitia James.

In late September, the stablecoin issuer won a trillion-dollar market manipulation lawsuit.

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Annie

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