Tether Lawsuit Over?

Bitfinex and Tether have settled with New York Attorney General’s office.

Some positive news out just this morning from this theblockcrypto.com post. Apparently Bitfinex and Tether have agreed to pay a total of $18.5 million in penalties to the state of New York, But admit no wrong doing?!?

How Is That Possible?

Most likely it was just cheaper to settle, which is often the case. The attorney general apparently found nothing, and might not have much of a case? I don't know the exact situation but this is good news for the space, and for our bull run.

The last thing we wanted was for a piece of bad news to rock the market and set us back right? So by agreeing to settle, Tether and Bitfinex get the attorney general off their backs so they can move forward. It puts this to rest, which means no more potential bad news hanging over the heads of these companies which is important too.

It's a win, a strange one but works out best for everyone involved.

Maybe a bit of a cash grab by the New York AG, so they get paid in the end and everyone is happy.

How Did Tether and Bitfinex Get Into the Lawsuit?

In a nut shell Tether and Bitfinex had been accused of engaging in "undisclosed, conflicted transactions to cover Bitfinex's losses by transferring money out of tether reserve funds.".

"Contrary to online speculation, there was no finding that Tether ever issued tethers [USDT] without backing, or to manipulate crypto prices," said Weinstein, a former federal prosecutor.

So the suite isn't about backing 1:1, and was actually about shady transactions taking place to hide losses from investors.

The NYAG has made a point of illustrating that at various times during 2017 and 2018 Tether had indeed issued USDT that was not backed. So that's a thing, still a thing..

As far as I can tell there was a bit of a cover up by Tether and Bitfinex and efforts to obfuscate the truth about what was really going on behind closed doors, and they got sued. However the AG couldn't make enough of a case or was happy enough just to settle and take some dollars.

So What Now?

As part of the settlement Tether has volunteered to make public a quarterly update on USDT's reserves backing, this is a good thing!

If Tether can be more transparent on a regular basis I believe over time, years, people will eventually come to forget some of these shenanigan's. Or at minimum those that are new to crypto over the coming years likely wont hear much about these issues, and they'll just be part of somewhat checkered past. Or maybe this will come back to haunt us.

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