https://www.ft.com/content/d7db307c-ef43-4af8-8f14-c1d1ba414058 By ALEX VEIGA yesterday The company behind a digital token called Tether has agreed to pay $41 million to settle charges that it misled investors by claiming the token was fully backed at all times by U.S. dollars and other fiat currencies. The Commodity Futures Trading Commission said Friday it charged Tether Holdings Limited with making untrue or misleading statements and omissions in relation to its claims. Specifically, the U.S. regulator found that since launching the token in 2014, Tether Holdings represented that its was a “stablecoin” with its value pegged to fiat currency, including U.S. dollars and euros. A stablecoin is a digital currency backed by real-world assets such as national currencies or other commodities. Unlike Bitcoin and other cryptocurrencies, stablecoins are designed to not fluctuate wildly in value. However, the CFTC determined that at least from June 1, 2016 through Feb. 25, 2019, Tether misrepresented to customers and the market that it maintained sufficient U.S. dollar reserves to back every Tether token in circulation with the equivalent amount of “corresponding fiat currency.” The agency also found that Tether failed to disclose that it included unsecured receivables and non-fiat assets in its reserves, and that the company falsely represented it would undergo regular audits to prove it was maintaining the fiat currency reserves it needed to back Tether tokens. In a statement, Tether, which is headquartered Hong Kong and maintains an office in Santa Monica, California, said the CFTC’s findings pertained to certain disclosures about the company’s reserves that were “fully resolved” in February 2019, when the company updated its terms of service. “As to the Tether reserves, there is no finding that Tether tokens were not fully backed at all times — simply that the reserves were not all in cash and all in a bank account titled in Tether’s name, at all times,” the company said, noting that it has “always maintained adequate reserves and has never failed to satisfy a redemption request.” Separately, the CFTC also ordered Bitfinex to pay a $1.5 million civil penalty after finding that the cryptocurrency trading platform made illegal, off-exchange retail commodity transactions involving digital assets with U.S. investors and operated as a futures commission merchant without registering to do so.
Yup, reminds me of realestate industry, politicians don't wish to get involved because of their own snouts in the trough.
None of this stuff matters unless the government is willing to take away the punch bowl, cratering the markets, financial system and economy overnight. Good luck with that... seems more likely that they'll have to keep the pedal floored and let the price level double or triple.
This is the reason I never invested my money in Tether. I’ve read it hundreds of times that there’s this confusion surrounding Tether being backed up by reserves because the company has changed its statement a lot of times.The issue for me is not whether it's backed up by any fiat currency or not but I’m more concerned about the transparency. If they are lying and making false claims I can hardly trust them with my money.