Cftc Tether Settlement 2021 event

Event · PageRank 0.0000

Overview

On October 15, 2021, the US Commodity Futures Trading Commission ordered Tether to pay a $41 million civil penalty and issued a cease-and-desist order over misleading claims that its USDT stablecoin was fully backed by US dollars. The CFTC found that although Tether had represented since 2014 that each token was backed 100% by fiat, for the majority of the period between June 1, 2016 and February 25, 2019 the reserves were not fully fiat-backed, included unsecured receivables and non-fiat assets, and that Tether's claims of routine professional audits were false. In the same action the CFTC fined affiliated exchange Bitfinex $1.5 million for illegal off-exchange retail commodity transactions and violating a prior order, bringing the combined total to $42.5 million.

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Frequently asked questions

How much was Tether fined by the CFTC?

$41 million, part of a combined $42.5 million action that also included a $1.5 million penalty against Bitfinex.

What did the CFTC find about Tether's reserves?

That for the majority of the time between at least June 1, 2016 and February 25, 2019, USDT was not fully backed by fiat reserves, and that reserves included unsecured receivables and non-fiat assets.

Were Tether's claimed audits real?

No. The CFTC order found Tether falsely claimed to undergo routine, professional audits that did not in fact take place.