Thread by @wallstreetpro

🚨 BREAKING: #CFTC orders #Tether and #Bitfinex to pay fines totaling $42.5M. Tether will pay $41M over claims that #stablecoin was fully backed by US Dollars. #Bitfitnex will pay $1.5M for illegal transactions and violation of prior CFTC Order.

cftc.gov/PressRoom/Pres…

"The order requires Tether to pay a civil monetary penalty of $41 million and to cease and desist from any further violations of the Commodity Exchange Act (CEA) and CFTC regulations, as charged."

"As found in the order, Tether 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."

"instead of holding all USDT token reserves in USD as represented, it relied upon unregulated entities and certain third-parties to hold funds comprising the reserves; comingled reserve funds with Bitfinex’s operational and customer funds; and held reserves in non-fiat products."

failed to disclose that it included unsecured receivables and non-fiat assets in its reserves,and that it falsely represented that it would undergo routine,professional audits to demonstrate that it maintained "100% reserves at all times” even though its reserves were not audited

"Order finds that Tether failed to complete routine, professional audits during the relevant time period."

"Tether retained an accounting firm to perform a review of its reserves on a date Tether selected in advance,and Bitfinex transferred over $382M to Tether’s bank account in advance of that review.The order recognizes that Tether has not completed an audit of the Tether reserves."