December 3, 2021

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CFTC fined $42.5 million on Tether

CFTC fined $42.5 million on Tether

Tether issued a statement refuting the CFTC’s claim of not holding sufficient cash reserves to support USDT.

The Commodity Futures Trading Commission, or CFTC, to penalize sister crypto companies Rope And Bitfinex Fines totaling $41 million and $1.5 million, respectively, for alleged violations Commodity Exchange Law, or CEA, and from a prior order from the CFTC.

The regulator found that Tether, the company behind an alternative currency of the same name, only had enough legal reserves to support the dollar-pegged assets 27.6% of the time during the 26-month period under review between 2016 and 2018. The agency also stated that Tether broke the law. By keeping a part of the reserves in non-credit financial instruments, as well as by combining operational and reserve funds.

In a concurrent action, the commodity futures watchdog added a fee to Bitfinex for facilitating “illegal off-exchange retail commodity transactions in digital assets with US persons” on its platform, as well as acting “as a commission trader in futures contracts, or FCM, without registering as necessary.” “.

The set fine deals a huge confidence blow to both Tether and Bitfinex

In a concurrent statement, the CFTC Commissioner, trunk dawnHe supported the measure and also expressed concern that the deal could “provide altcoin users with a false sense of comfort” because they might wrongly conclude that the CFTC regulates altcoins and supervises their issuers.

While the CFTC has applied a broad definition of the word “commodity” to altcoins in this case, Stump has distanced the commission from regulating this asset class and having a “daily view of the issuer’s business.” Altcoins.

Tether issued a statement rebutting it, insisting he “maintains adequate reservations” at all times. The company explained its decision in line with its desire to “resolve this matter in order to move forward and focus on the future.”

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Source: Cointelegraph