CFTC Goes Round The World To Fine Tether

There appears to be a coming turf war of regulators where the cryptocurrency community may become collateral damage.

The Commodity Futures Trading Commission last week hit Tether with a $41 million fine for “making untrue or misleading statements and omissions of material fact in connection with the U.S. dollar tether token (USDT) stablecoin.”

While we all thought that the Securities and Exchange Commission went after issuers providing misleading staements, the CFTC has weighed in under the Commodity Exchange Act.

The charge is serious.

The agency contended that “since its launch in 2014, Tether has represented that the tether token is a stablecoin with its value pegged to fiat currency and 100% backed by corresponding fiat assets, including U.S. dollars and euros.”

However, among other deficiencies, the company was found to have have “held sufficient fiat reserves in its accounts to back USDT tether tokens in circulation for only 27.6% of the days in a 26-month sample time period from 2016 through 2018.”

In a rather unusual roll of the credits showing how difficult it is to police these international cryptocurrency entities, the CFTC thanked, among others, the enforcement agencies in the Bahamas, British Virgin Islands, Ontario, Panama, Portugal and the Seychelles.

Source: https://jeffkoeppel.wordpress.com/2021/10/18/cftc-goes-round-the-world-to-fine-tether/