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CFTC fines Tether stablecoin $41m for misrepresentation

tether

Today the Commodity Futures Trading Commission (CFTC) said it reached a settlement with stablecoin operator Tether and associated iFinex that operates the Bitfinex cryptocurrency exchange. Tether received a $41 million penalty for untrue or misleading statements about the reserves that back the stablecoin. And Bitfinex was ordered to pay a $1.5 million fine for other infractions.

“This case highlights the expectation of honesty and transparency in the rapidly growing and developing digital assets marketplace,” said Acting Chairman Rostin Behnam. 

At issue were statements by Tether that its stablecoin reserves were backed by the “equivalent amount of corresponding fiat currency” held by Tether and “safely deposited” in Tether’s bank accounts. According to the CFTC, during a 26-month sample time period from 2016 through 2018, that statement was only valid for 27.6% of the days.

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