Bitcoin jumps $4,000 as Bitfinex and Tether settle with New York court 🚨 This article is 4 years old...
Bitcoin jumps $4,000 as Bitfinex and Tether settle with New York court
2 min read
Updated: Feb. 23, 2021 at 1:58 pm UTC
Cover art/illustration via CryptoSlate. Image includes combined content which may include AI-generated content.
A long-running case regarding Tether’s alleged fake dollars and Bitfinex’s involvement in covering up parts of the former’s business have drawn to a close today.
$18.5 million fine
Stablecoin issuer Tether and Bitfinex, a prominent crypto exchange and its parent company, have today settled with New York courts on a long-running case that saw the latter alleged Tether’s questionable reserves.
Bitfinex and Tether agree to pay over $18.5 million in a fine that effectively shut the case for good. The market, in turn, responded with positive sentiment to the landmark outcome and sent Bitcoin (and other cryptocurrencies) surging upwards.
If USDT was in trouble, it could send the entire crypto into a nuclear winter, because so much trading is denominated in USDT.
We no longer have to worry about this scenario. Up only.
And slap yourself if your had thought you had insider info and panic sold.
— Qiao Wang (@QwQiao) February 23, 2021
However, both Bitfinex and Tether are now barred from offering their services to any New York resident or citizen. “Today’s agreement requires Bitfinex and Tether to discontinue any trading activity with New Yorkers. In addition, these companies must submit regular reports to the OAG to ensure compliance with this prohibition,” the court document read.
As per a release by the New York court, Attorney General Letitia James noted that Tether’s claims that its virtual currency was fully backed by U.S. dollars at all times were a lie. “These companies obscured the true risk investors faced and were operated by unlicensed and unregulated individuals and entities dealing in the darkest corners of the financial system,” she said.
James added that a previous investigation by the Office of the Attorney General (OAG) had concluded that Tether had no access to banking anywhere in the world and, hence, had no reserves in circulation “contrary to its representations” of having each Tether backed by a US dollar.
The investigation came after Bitfinex began to increasingly rely on third-party “payment processors” in the years after 2017 to handle customer deposits and withdrawals from its trading platform.
However, in 2018, the exchange was said to have suffered a massive and undisclosed loss of funds because of its relationship with a Panama-based bank known as “Crypto Capital Corp”—a loss said to be to the tune of $850 million.
Tether celebrates; Bitcoin jumps
Tether, on its part, issued a statement noting that there was no finding that conclusively proved the firm ever issued USDT without backing or to impact crypto prices. “This settlement shows our commitment to the future of the industry, and to transparency with quarterly disclosures of Tether reserves going forward,” it said.
No finding that Tether ever issued without backing or to impact crypto prices. This settlement shows our commitment to the future of the industry, and to transparency with quarterly disclosures of @tether_to reserves going forward. 2/3
— Tether (@Tether_to) February 23, 2021
Meanwhile, the sentiment among both retail and professional crypto traders was overly positive. Kyle Davies, the co-founder of Singapore-based crypto hedge fund Three Arrows Capital said today, “The most significant existential threat to crypto has been lifted today.”
The most significant existential threat to crypto has been lifted today
— Kyle Davies (@kyled116) February 23, 2021
The news sent Bitcoin surging by over 5% by press time—a move of over $4,200 since a price plunge yesterday.
Bitcoin Market Data
At the time of press 1:58 pm UTC on Feb. 23, 2021, Bitcoin is ranked #1 by market cap and the price is down 8.33% over the past 24 hours. Bitcoin has a market capitalization of $910.08 billion with a 24-hour trading volume of $114.46 billion. Learn more about Bitcoin ›
Crypto Market Summary
At the time of press 1:58 pm UTC on Feb. 23, 2021, the total crypto market is valued at at $1.45 trillion with a 24-hour volume of $282.19 billion. Bitcoin dominance is currently at 62.20%. Learn more about the crypto market ›
Mentioned in this article
Latest Bitcoin Stories
Featured Story
Advertise Here
In this article
Bitcoin, a decentralized currency that defies the sway of central banks or administrators, transacts electronically, circumventing intermediaries via a peer-to-peer network.
Tether
$1.00000
Launched in 2014, Tether is a blockchain-enabled platform designed to facilitate the use of fiat currencies in a digital manner.
Bitfinex
Bitfinex is a digital asset trading platform offering state-of-the-art services for digital currency traders and global liquidity providers.