let's take a look at tether's 41 million us dollar fine
hello i'm rachel jones and you're watching calkin media
now stable coins are a type of crypto that's tied to an external asset like fiat or gold the
most popular and largest of these stable coins is tether which claims to be linked to the us dollar
however a recent fine has caused many to doubt whether it is in fact authentically linked to the
us dollar and this isn't the first time tether was slapped with a 41 million dollar fine in
october for untrue or is misleading statements regarding backing by fiat currency u.s commodity
futures trading commission issued the heavy fine claiming the companies behind the world's largest
stablecoin misled its customers in the period from the 1st of june 2016 to the 25th of february 2019.
during that period the agency said teva had claimed it had sufficient us dollar reserves
to back each tether token when in fact this was not the case rather the agency found that the
companies only held sufficient fiat reserves in their accounts to bag tether tokens in circulation
for only 27.6 of the days throughout the 26-month sample according to the u.s commodity futures
trading commission tether relied on unregulated entities and third parties to keep the funds which
made up the tether token reserves a further fine of 1.5 million dollars was issued by the agency
to bitfinex and exchange linked to tether the fine was issued as a result of bitfinex
allowing illegal transactions with ineligible american retail investors in the period from the
1st of march 2016 to at least the 31st of december 2018. however there have been some concerns
regarding tether in the past two in february 2021 tether released a report assuring the public
that it was fully bagged by cash reserves a report carried out by an independent accountant
fanteva held capital in assets which did exceed its liabilities although it didn't
detail exactly what assets and liabilities tether held at that point the new york attorney general
conducted a thorough investigation and found that tether had loaded funds into two bank accounts
and this was just before the accountant conducted the initial report and then subsequently released
the funds as soon as the accountant finished the investigation the penalty for that
infringement was an 18.5 million dollar fine as well as a ban from operating out of new york
tether responded to the fine in a statement on its website denying that tether tokens were not
fully always banked it also claimed that the reserves were not all kept in a bank account
titled in tether's name always that meant it was sometimes kept in other accounts
not named tether regardless this latest find is not good news for tether and it aims to cement
itself as a safe and solid digital currency in an otherwise volatile market now if you like
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