Crypto companies Bitfinex and Tether signed with the office of the New York Attorney General (NYAG) and ended a legal dispute that started in mid-2019.
Bitfinex and Tether agreed to pay $ 18.5 million as part of the deal, New York Attorney General Letitia James said.
In April 2019, the NYAG office claimed that Bitfinex was using Tether’s funds to secretly cover the $ 850 million lost to payment processor Crypto Capital. Lost funds allegedly triggered withdrawal issues for Bitfinex customers in late 2018.
Bitfinex said he was not losing money at the time. Instead, Crypto Capital’s funds were seized by government officials in Poland, and the US Bitfinex has been trying to reclaim those funds ever since.
What’s in the deal?
As part of today’s deal, Bitfinex and Tether have admitted they haven’t done anything wrong. Jason Weinstein, partner of Steptoe & Johnson and consultant to Bitfinex and Tether, said the NYAG office’s findings “are limited only to the nature and timing of specific disclosures.”
“Contrary to online speculation, there was no evidence that Tether was releasing tether [USDT] without support or to manipulate crypto prices,” said Weinstein, a former federal prosecutor.
Stuart Hoegner, general counsel for Bitfinex and Tether, said the amount of the deal should be seen as “a measure of our desire to leave this issue behind and focus on our business.”
As part of the deal, Tether volunteered to provide NYAG’s office and the public with a quarterly update on USDT’s reserve support, as a recommendation agreed by NYAG. Hoegner said, “We share the Attorney General’s goal of increasing transparency. “We will disclose additional information on Tether’s reserves quarterly – both to the Attorney General’s Office and to the public,” he said.
In the payment deal, the NYAG office also accepted Bitfinex’s last loan repayment to Tether. Earlier this month, Bitfinex announced it had repaid Tether $ 550 million of the remaining loan balance and closed the credit line.
With the deal coming to an end, the longstanding legal dispute, which at one point caused lawyers of both sides to dispute in the New York court of appeal. Bitfinex and Tether say they have provided more than 2.5 million pages of documents to the NYAG office to close the matter.