Tether (USDT) Reaches Settlement Following New York Attorney General’s Trial

Tether and Bitfinex have reached an $ 18.5 million deal with the New York (NY) Attorney General.

Bitfinex and Tether are banned from continuing illegal activities in New York.

The USDT continues to be monitored by regulators

The stablecoin Tether (USDT) and the exchange of crypto Bitfinex reached an agreement with the Attorney General of the State of New York.

The deal requires Tether and Bitfinex to cease all other business activity with New Yorkers, as well as to pay $ 18.5 million in penalties, in addition to requiring a number of steps to increase transparency, according to an announcement from the Attorney General’s Office (AGO).

“This resolution makes it clear that those who trade virtual currencies in New York State and think they can avoid our laws cannot, and will not,” said the New York State Attorney General, Letitia James.

Details of Tether’s Trial (USDT)

The deal comes after an OAG investigation revealed that Tether and iFinex, the operator of Bitfinex, had made false claims about Tether’s backing and the movement of hundreds of millions of dollars between the two companies. According to the BVG, on November 2, 2018, Tether transferred hundreds of millions of dollars from its bank accounts to those of Bitfinex.

Settlement resolves public disclosure allegations related to a loan Tether made to Bitfinex as the exchange struggled to access roughly $ 850 million in funds held by a payment processor in 2018, according to a Tether announcement. The loan was made to ensure continuity for Bitfinex customers, and has since been paid in full, including interest, Tether said.

Tether announced in a tweet:

“Under the settlement we do not admit any wrongdoing, the settlement amount we agreed to pay to the Attorney General’s office should be seen as a measure of our willingness to leave this issue behind and focus on our activities. ”

Growing problems

These are not the only issues that have been raised. Last year, the STABLE Law was introduced in the US Congress which, if enacted, could be devastating for Tether and stablecoins.

The law calls for banking licenses for issuers of stablecoins such as USDT . It offers additional requirements for Federal Reserve reporting, also offering issuance approval in addition to the permanent audit requirements and an insurance policy to cover assets.

Another proposal may require stablecoin issuers to store their reserves directly with the Federal Reserve. This puts them under the control of the central bank and severely limits their open use. Although not yet enacted, this law is representative of increasing regulatory pressure.