Bitfinex and Tether pay fine $18.5 Milln to withdraw the charges of the New York prosecutor's office-Bits Media

The prosecutor's office of New York (Nyag) settled a judicial dispute with Bitfinex and Tether. Firms will be paid $18.5 Mill of fines and will be required to provide quarterly reports on their activities.

NYAG announced
On the settlement of claims against Bitfinex and Tether, Officially completing investigation, which began in April 2019 of the year. According to the conditions of settlement, Bitfinex and Tether do not recognize any violations, but they pay $18.5 Milly in the form of fines and will provide quarterly reports with a description of the composition of Tether reserves within two years.

These reports will correspond to information about reserves, which Tether has already provided the prosecutor's office. NYAG does not charge any charges as part of the settlement. New York Prosecutor General Leticia James (Letitia James) said:

“Bitfinex and Tether recklessly and illegally covered huge financial losses, to save your scheme and protect your financial results. Tether statements about that, that his virtual currency has always been fully provided with US dollars, were a lie ".

Settlement can help solve the issue
reality providing USDT reserves, which has long excited participants in the cryptocurrency industry. Since now Tether will be obliged to report on his reserves, Depending on the level of details of the reports, Investors may have more effective tools to assess the statement about, that the company produces unsecured tokens, to artificially inflate the price of bitcoin.

The prosecutor's office of New York claims, that Bitfinex and Tether held part of the USDT reserves in trust for several months in 2017 year and could not reveal their problems with Crypto Capital Corp in a timely manner. NYAG also found false data in the article on the BITFINEX blog, published after the first application for the investigation, in which the exchange reported, that the money at the disposal of Crypto Capital "is" confiscated and protected ".

New York prosecutor's office filed a complaint against Bitfinex and Tether in April 2019 of the year, affirming, that Bitfinex covered a loss of more $850 Milln by borrowing money from Tether reserves.

Settlement of accusations

STEPTOE Law Firm partner&Johnson llc Charles Michael (Charles Michael), which presented the company in the investigation, said, that settlement “eliminates claims about public disclosure” against the loan of Tether Birge Bitfinex.

"To the honor of the Prosecutor General, After two and a half years of investigation, Its conclusions are limited only by the nature and timing of disclosure of certain information ", – Michael said. “And contrary to speculation on the Internet, Not discovered, What Tether has ever produced USDT without providing or for manipulating cryptocurrency prices ".

However, in the agreement
indicated: “As of 2 November 2018 year USDT was not provided in the ratio 1:1 US dollars on Tether bank account, Since a significant part of the security on Deltec was transferred to Bitfinex to reimburse money, taken by Crypto Capital. At the same time, the corresponding money, Transferred from the Crypto Capital Bitfinex account to Crypto Capital Tether, suffered from the actions of Crypto Capital ".

As the chief legal adviser of Bitfinex and Tether Stewart Hugnener said (Stuart Hoegner), $18.5 million, which companies will pay as part of the settlement, "It should be considered as the measure of our desire to leave this issue behind and focus on our business". He said, that Tether “voluntarily” provided NYAG information about the provision of USDT and will continue to do this within two years.

“We suggested, so that, under a settlement agreement, we disclose quarterly – As the General Prosecutor's Office, so the public – Additional information about Tether reserves ", – Hyugner said.

Disclosure of information will include the breakdown of funds and their equivalents, in reserves. It is not clear, in what form the data will be provided and whether the reports will be submitted by a third -party auditor or law firm. The agreement only says, that the disclosure of information will “generally” correspond to those data, that the companies provided NYAG during the investigation. Bitfinex and Tether should also disclose any information about money transfers among themselves.

Two -year lawsuit

In the spring 2019 years, the general prosecutor of New York Leticia James announced a court investigation, during which it turned out, that Bitfinex has lost access to almost $1 billion and covered losses from the money of her subsidiary Tether, which provided Bitfinex loan on $550 million and opened a credit line.

NYAG investigation provided a lawsuit to freeze this credit line, Prevention of any further transfers of money and forced to transfer any documentation on the transaction, against which both firms objected in court. The judge made a decision in favor of NYAG, which later also won the appeal. According to Hyugner, Ultimately, the companies revealed more 2.5 million documents.

“The loan was provided to ensure the continuity of the Bitfinex exchange work. Since then he has been extinguished
ahead of schedule and completely, Including interest. At any stage, the loan did not affect customers or the ability of Tether to process payments ", – Michael said.

NYAG investigation has not reduced the demand for USDT. From the moment the investigation began, the USDT market capitalization has grown from $2 billion to more $34 billion. The price of BTC has recently rushed up, Climbing to a new historical maximum – More than $ 58,000. However, at the beginning of the week, a correction occurred on the market
And Bitcoin returned to $46 000.

“We are glad, that our customers have shown loyalty and commitment to our business over the past two years, While this investigation continued ... we hope, that both companies will continue to lead in the industry ", – Hyugner said.

The missing millions

After the start of the investigation, Bitfinex and Tether filed a lawsuit demanding to return companies to accounts $800 Million client money, frozen in four countries after the arrest of Crypto Capital accounts. It is not clear, How much time may it take to resolve this issue, Given different jurisdictions and current cases against Crypto Capital operators.

In the fall 2019 For years, the Prosecutor's Office of the Southern District of New York accused the founder of Crypto Capital, Joseph of Banking Fraud, conspiracy for its implementation and in the provision of money transfer services without a license. Last spring IFINEX, Parental company Bitfinex, I sued Suntrust in Georgia, Bank of Colorado in Colorado and Arizon Bank ABT&Trust, Hoping to return the blocked ones $800 million. At that time, Hyugner reported, that efforts were “aimed at receiving additional information” about Crypto Capital and its money.

“Bitfinex has become a victim of fraud and defends its rights to money, Stolen Crypto Capital, Through legal measures, Initiated in different countries ".

Settlement in the Bitfinex and Tether case – One of the largest cryptocurrencies in the history. In October 2019 years Block.one paid
SEC $24 Milln for unregistered ICO EOS, And Telegram agreed last summer
pay $18.5 Milln to resolve the trial with SEC in relation to ICO Ton.