The Bitfinex and Tether Cryptomain Trading Platforms paid a fine of $18.5 million to New York State to stop legal proceedings accusing them of false and fraudulent practices.
The two companies will also have to put an end to their activities with the New Yorkers, announced Tuesday in a press release the prosecutor of the State of New York, Letitia James.
« Bitfinex and Tether have dangerously and illegally concealed huge financial losses in order to continue their schemes and preserve their bilans , » James said.
Tether is the originator of « stablecoin » (« monnaie stable ») tether, an asset whose value is supposed to be indexed to that of a fiduciary currency, in this case the US dollar.
However, according to the New York State Attorney, « les Tether’s assertions that its virtual currency was permanently backed by US dollars were a lie. »
In conducting the investigation, Ms. James’ services discovered, among other things, that as of mid-2017, Tether did not have access to any banking services around the world and therefore had no cash reserves.
The Bitfinex platform also found itself in a state of insolvency, the attorney says, and attempted to hide the loss in 2018 of $850 million deposited in the Panamanian entity Crypto Capital.
Bitfinex then allegedly falsely claimed that the funds were safeguarded.
« La reality was that Bitfinex did not know the exact location of all of its client funds held by Crytpo Capital and therefore was not in a position to provide such garanties , » Ms. James accuses.
In a joint statement issued Tuesday, the two companies acknowledged the agreement with New York State, but did not admit to any wrongdoing.
They say that a loan from Tether to Bitfinex, when Bitfinex was having trouble accessing the $850 million held in Panama, was not illegal.
« Le loan was made to ensure continuity for Bitfinex customers. It has since been repaid before maturity and in full, with interest compris », the companies wrote.
The two companies nevertheless say that they share with Ms. James « l ‘goal of transparency accrue » about the cryptomonnages.
These virtual currencies are frequently accused of operating in an opaque manner. On Monday, US Treasury Secretary Janet Yellen attacked Bitcoin again, regretting that the most famous of the cryptosystems is often used « pour finance illicite ».
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