Recently, the Commodity Futures Trading Commission of the United States filed a charge against Tether and Bitfinex that will see the sister companies pay about $42 million in fines.
CFTC posted the announcement on its website, and it stated that the company behind USDT had a misleading and false statement about its product. According to the report on the website, Tether claimed its stablecoin is backed by the U.S. Dollar. As a result, the company was ordered to pay a fine of $41 million.
Simultaneously, the Commodity Futures Trading Commission charged iFinex for misdeeds related to Bitfinex, a crypto exchange owned and operated by iFinex. In the order filed, Bitfinex was engaged in retail commodity transactions that are off-exchange and illegal, and they also acted as an FCM – Futures Commission Merchant with due registration.
As a result, Bitfinex will be paying a fine of $1.5 million and will also be required to maintain and implement new systems designed to filter illegal retail commodity transactions. The General Counsel of Bitfinex, Stuart Hoegner, said the two inquiries on the actions that happened in the ecosystem at a different stipulated time.
Speaking about the order for Tether, Hoegner said the USDT issuer was known for its adequate reserve maintenance and had not for once failed in satisfying a redemption request. The demand from the regulator referred to the disclosures made two years ago, but Hoegner pointed out that the CFTC agreed the issues were resolved after the terms of services of the firm were updated in 2019.
The order against Bitfinex was related to implementing the ban placed on the exchange customers from the United States. The general counsel said the order had the violations implemented in December 2018.
In a statement published by Commissioner Dawn Stump in support of the actions taken by the CFTC, he cited the concerns on how some future applications in the digital asset firms could set some precedent for enforcement actions. In addition, she mentioned that this action taken by CFTC could make investors wonder and confused about the agency’s mandate.
Referring to the settlement from Bitfinex, the commissioner drew the public’s attention to her recent statement on the enforcement actions taken by the CFTC on Kraken. Dawn Stump, in that statement, called for more clarity on the requirements for FCM registration and the plans of the commission in applying the requirements.