The cryptocurrency platform Bitfinex will cease operations in New York after a millionaire agreement with the State attorney general, which during the last two years has investigated the entity for allegedly making “false statements” about its support for the virtual currency Tether and “cover up” massive losses.
According to the agreement disclosed this Tuesday by the New York Prosecutor’s Office, the managers of the platform Bitfinex and cryptocurrency Tether they have agreed to stop operating in the state, pay a fine of 18.5 million dollars and “increase their transparency”, although they have not “admitted or denied” the allegations of fraud by the authorities.
The Prosecutor’s Office alleges that iFinex, Bitfinex’s parent, and Tether, the issuer of a cryptocurrency considered “stable” – it always has the same value in real dollars – made false statements about their liquidity guarantees since in mid-2017 Tether “did not have access to banks in nowhere in the world “to back up its value.
It also alleges that in the following years iFinex and Tether transferred funds between them “to cover up the truth about Bitfinex’s massive losses”, of around $ 850 million, stemming from problems with a payment processing firm. , and that the platform misled its customers by assuring them that their money was “safeguarded.”
Furthermore, the two entities allegedly lied to the prosecution by stating that they did not allow New Yorkers to do business when in fact they had been doing so for years “without a license or regulation, illegally trading virtual currency in New York State.”
“Bitfinex and Tether recklessly and illegally covered up massive financial losses to keep their scheme going and protect their accounts. Tether’s allegations that its virtual currency was fully backed by US dollars at all times were a lie,” he said. ± winged the prosecutor Letitia James it’s a statement.
The agreement with the New York Prosecutor’s Office obliges Bitfinex and Tether to “stop any activity of trading with New Yorkers “and both entities must deliver” regularly “quarterly reports on the status of their accounts, their transfers, their processes to transfer funds from clients and the support of the tethers.
34,000 million ‘tethers’ in the cryptocurrency market
The authorities believe that today there are 34,000 million tethers that are used in the cryptocurrency market, and a good part of the bitcoins in circulation they are acquired using this currency, so analysts point out the importance of scrutiny of this type of “stable” cryptocurrency.
In a statement, Bitfinex and Tether rule out admitting any misconduct, and believe that the fine should be interpreted as their willingness “to leave the matter behind” after cooperating with the Prosecutor’s Office on “public communications” about their finances.
“The Attorney General’s office concludes, in essence, that we could have done better by publicly reporting these events. Contrary to internet speculation, after two and a half years it has not been concluded that Tether has never issued tethers without endorsement or to manipulate the prices of cryptocurrencies, “they add.
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