Advertisement
Australia markets closed
  • ALL ORDS

    8,153.70
    +80.10 (+0.99%)
     
  • ASX 200

    7,896.90
    +77.30 (+0.99%)
     
  • AUD/USD

    0.6518
    -0.0018 (-0.28%)
     
  • OIL

    83.11
    -0.06 (-0.07%)
     
  • GOLD

    2,254.80
    +16.40 (+0.73%)
     
  • Bitcoin AUD

    108,561.41
    +2,396.91 (+2.26%)
     
  • CMC Crypto 200

    885.54
    0.00 (0.00%)
     
  • AUD/EUR

    0.6036
    +0.0005 (+0.09%)
     
  • AUD/NZD

    1.0904
    +0.0024 (+0.22%)
     
  • NZX 50

    12,105.29
    +94.63 (+0.79%)
     
  • NASDAQ

    18,254.69
    -26.15 (-0.14%)
     
  • FTSE

    7,952.62
    +20.64 (+0.26%)
     
  • Dow Jones

    39,807.37
    +47.29 (+0.12%)
     
  • DAX

    18,492.49
    +15.40 (+0.08%)
     
  • Hang Seng

    16,541.42
    +148.58 (+0.91%)
     
  • NIKKEI 225

    40,168.07
    -594.66 (-1.46%)
     

Bitfinex, Tether owner pays $18.5 million fine to settle NYAG cryptocurrency cover-up charges

FILE PHOTO: New York State Attorney General Letitia James Inc in New York City

By Jonathan Stempel

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.

ADVERTISEMENT

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.

Bitfinex and Tether did not admit or deny wrongdoing in agreeing to settle.

In a statement, they said the funds in question had been fully repaid with interest, and never impacted Tether's ability to process redemptions.

"The Attorney General's Office concluded, in essence, that we could have done better in publicly disclosing these events," Bitfinex and Tether said. "Contrary to online speculation, after 2-1/2 years there was no finding that Tether ever issued tethers without backing, or to manipulate crypto prices."

(Reporting by Jonathan Stempel in New York; editing by John Stonestreet)