The protracted legal drama was finally resolved on February 23 when the New York State Attorney’s Office announced that it had reached an agreement with the Bitfinex cryptocurrency exchange after a 22-month investigation into whether the company was trying to hide it. The losses, which are estimated at $ 850 million, are due to the distortion of their support in US dollars by the established guarantees.

Under the terms of the announced settlement, which now marks the end of the investigation launched by NYAG in the first quarter of 2019, Bitfinex and Tether will pay the government agency a fixed amount of $ 18.5 million, but will not be required to admit the breach. . This is. However, the agreement clearly states that Bitfinex and Tether can no longer serve customers in the state of New York from now on.

Furthermore, over the next 24 months, Bitfinex and Tether will be required to provide NYAG with quarterly reports on the current state of reserves and account for any transactions between the two companies. Furthermore, companies will also be required to provide public reports on the specific composition of their cash and non-cash reserves.

In this connection, the New York Minister of Justice Laetitia James said that Bitfinex and Tether covered their losses and defrauded their customers by overestimating the reserves. When asked about this latest development, Stuart Hoogner, Tether’s General Counsel, answered the Cointelegraph in a non-binding way and said:

“We are pleased that we have reached a legal settlement with the New York Attorney General’s office and have left this issue. We look forward to continuing to operate our industry and serve our customers. ”
Does an exclusive ban in New York make sense?
To better understand the legal situation, the Cointelegraph spoke with Josh Lawler, a partner in Zuber Lawler, a law firm specializing in cryptography and blockchain technology. In his opinion, the lawsuit and in particular the nature of the settlement in which Tether and Bitfinex concluded the negotiations highlights the confusion inherent in the regulation of digital assets in the United States.

In addition, the agreement between Bitfinex and Tether to ban the use of their products and services by people and organizations in New York, according to Lawler, on paper seems almost impossible:

“Are they saying that no one with a relationship in New York can own or trade Tether? Tether is traded on almost all cryptocurrency exchanges. Although Tether can limit the use of Tether tokens by New Yorkers, is it really a good idea?” the world where each state can select specific projects from the distributed ledger from among those operating within its jurisdiction? ”
Finally, even if the agreement between Bitfinex / Tether and NYAG was in the form of a settlement, which means that it is not subject to appeal or federal control under the trade regulation, state bans can supplement existing regulations.

Extra transparency is always good
Now that regulators are asking Tether and Bitfinex to describe their cash transactions in more detail and impose a small fine, it seems that a growing number of companies doing business with USDT now have to take off their socks and get their general ledgers. Placement. Joel Edgerton, CEO of bitFlyer USA, told Cointelegraph:

“The essence of this settlement is not about interrupting the lawsuit, but about strengthening the obligation of transparency. The risk remains for USDT, but increased transparency should strengthen the company’s management in transaction volume. ”
In a somewhat similar context, Tim Bion, a PR specialist at OK Group, the parent company behind the OKCoin cryptocurrency exchange, believes that the settlement can be seen as a win-win scenario not only for NY OAG and Tether / Bitfinex, but also for others. As for the cryptocurrency industry as a whole, citing the fact that the 17-page settlement did not reveal any mention of Bitcoin counterfeiting (BTC) using the USDT.

Source: CoinTelegraph

LEAVE A REPLY