(Reuters) – The owner of the Tether cryptocurrency and the Bitfinex trading platform will pay a $ 18.5 million fine to settle fees that the mixed client and corporate funds to cover the $ 850 million that disappeared, New said. York Attorney General Letitia James on Tuesday
Attorney General James said that the civil settlement with iFinex Inc. in Hong Kong and related entities will also require them to stop trading activities with New Yorkers.
Bitfinex was accused of sending $ 850 million to Crypto Capital Corp., a payment processor believed to be in Panama, without telling customers, and after the funds disappeared, drained at least $ 700 million from Tether's reserves.
Attorney General James said the diversion violated Tether's public promise to investors that its currency had been backed one-by-one by US dollars, a practice she said had begun in 201
"These companies hid the real risks as investors faced, "a statement.
Tether is the world's third largest cryptocurrency, after Bitcoin and Ethereum, according to CoinMarketCap. Its market value was about $ 34.8 billion on Tuesday, compared to $ 2.8 billion when Attorney General James announced his allegations in April 2019.
Bitfinex and Tether did not admit or deny wrongdoing when they agreed to resolve.
In a statement, they said that the funds in question had been repaid in full with interest and never affected Tether's ability to process redemption.
"The Attorney General's Office essentially concluded that we could have done better by publishing these events," Bitfinex and Tether said. "Contrary to online speculation, there was no discovery that Tether ever issued tether without support or manipulating cryptocurrencies after 2-1 / 2 years."