A long-standing legal drama finally found resolution on Feb. 23, with the New York Attorney General’s office announcing that it had come to a settlement with cryptocurrency exchange Bitfinex after a 22-month inquiry into whether the company had been trying to cover up its losses — touted to be worth $850 million — by misrepresenting the degree to which its Tether (USDT) reserves were backed by fiat collateral.
According to the terms of the announced settlement, which now marks an end to the inquiry that was initiated by the NYAG back in Q1 2019, Bitfinex and Tether will pay the government body a fixed sum of $18.5 million but will not be required to admit to any wrongdoing. That being said, the settlement clearly states that henceforth, Bitfinex and Tether can no longer service customers in the state of New York.
Furthermore, over the course of the next 24 months, Bitfinex and Tether will be required to provide the NYAG with quarterly reports of their current reserve status and duly account for any transactions taking place between the two companies. Not only that, but the firms will also be required to provide public reports for the specific composition of their cash and non-cash reserves.
On the subject, NY Attorney General Letitia James said that both Bitfinex and Tether had covered up their losses and deceived their customers by overstating their reserves. When asked about this most recent development, Stuart Hoegner, general counsel at Tether, replied to Cointelegraph with a non-committal answer, stating:
“We are pleased to have reached a settlement of legal proceedings with the New York Attorney General’s Office and to have put this matter behind us. We look forward to continuing to lead our industry and serve our customers.”
Does a New York exclusive ban even make sense?
To gain a better legal perspective of the situation, Cointelegraph spoke with Josh Lawler, partner at Zuber Lawler — a law firm with expertise in crypto and blockchain technology….