Cryptocurrencies
Tether’s Latest Black Eye Is CFTC Fine for Lying About Reserves
- Biggest stablecoin issuer hit with $41 million penalty
- Affiliated crypto exchange Bitfinex also fined $1.5 million
Photographer: Andrew Harrer/Bloomberg
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Tether will pay $41 million to settle allegations it lied in claiming its digital tokens were fully backed by fiat currencies, putting a major compliance headache behind the world’s biggest issuer of stablecoins even as regulatory scrutiny intensifies.
For years, Tether told customers and the broader cryptocurrency market that it had $1 in reserve to back every token, the Commodity Futures Trading Commission said in a Friday statement. That claim was wildly misleading, according to the agency. For instance, from June to September 2017, there was never more than $61.5 million backing Tether, even as roughly 442 million coins were circulating at one point.