Bitfinex, Tether owner pays $18.5 million fine to settle NYAG cryptocurrency cover-up charges
Jonathan Stempel, 23 February 2021
NEW YORK (Reuters) – The owner of the Tether cryptocurrency and Bitfinex trading platform will pay an $18.5 million fine to settle charges it commingled client and corporate funds to cover up $850 million that went missing, New York Attorney General Letitia James said on Tuesday.
James said the civil settlement with Hong Kong-based iFinex Inc and related entities will also require them to halt trading activity with New Yorkers.
Bitfinex was accused of having sent the $850 million to Crypto Capital Corp, a payment processor believed to be in Panama, without telling clients, and after the funds went missing, draining at least $700 million from Tether’s reserves.
James said the diversion broke Tether’s public promise to investors that its currency had been backed one-to-one by U.S. dollars, a practice she said had begun in 2017.
“These companies obscured the true risk investors faced,” James said in a statement.
Tether is the world’s third-largest cryptocurrency, after Bitcoin and Ethereum, according to CoinMarketCap. Its market value was about $34.8 billion on Tuesday, up from $2.8 billion when James announced her charges in April 2019.
