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Wednesday, March 29, 2023

Tether And NYAG Settlement Raises New Transparency Questions

Even though the lawsuit against Tether has finally been settled and some level of transparency has been achieved, several experts still think that this state-centric ban might not be the ideal way out of this problem.

The prolonged legal problem eventually resolved on the 23rd of February after the Attorney General of New York made the public announcement of the settlement of the lawsuit against Bitfinex which is a cryptocurrency exchange.

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The legal drama took place for almost 22 months where the company was inquired on the basis of the way they were trying to hide their losses that peddled almost $850 million worth of shares by misrepresenting the figure of reserves present in Tether and backing it with fiat collateral.

Tether Transparency Still In Question

The terms of the settlement that were announced included the fact that the inquiry which was triggered by the Attorney general of NY in the 1st quarter of 2019 requires Tether and Bitfinex to pay a fixed amount of $18.5 million to the government as well as get leeway for not disclosing any of their wrongdoing.

On the other hand, the settlement terms also stated that they will not be allowed to conduct any customer service in NY anymore. In addition Tether and Bitfinex is required to present their quarterly reports to NYAG for the forthcoming 24 months that must include their transactions and the present reserve status. Furthermore, they must provide reports on their reserves of cash and non-cash.

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Some of the experts have commented that the terms on paper are almost impossible to be implemented in reality. The important factor of the settlement is the commitment to transparency. It is believed that Tether and other stable coins must remain true to their transparency commitment.

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