On April 17th, 2020, Tether Ltd, a cryptocurrency-based stablecoin issuer and digital asset platform, and Bitfinex, a cryptocurrency exchange, announced a settlement to an ongoing dispute that began in 2019. Under the terms of the settlement, Tether and Bitfinex are set to share certain financial information about both companies with the New York Attorney General’s office in response to a Freedom of Information Law (FOIL) request.
Tether had initially refused to comply with the FOIL request, alleging that doing so would compromise the privacy of its business operations, clients, and proprietary programs. After reaching the settlement agreement, Tether will now provide the requested financial information to the Attorney General’s office.
The New York Attorney General’s office originally issued the FOIL request in April 2019, following allegations from the New York-based law firm of Roche Freedman that Bitfinex had been using Tether’s reserves to cover up the losses associated with a failed business venture with Crypto Capital. The Attorney General’s office sought financial records from the companies in an attempt to determine the accuracy of these allegations.
The settlement does not involve any admission of wrongdoing or liability on either Bitfinex or Tether’s part. Nonetheless, it is an important step in ensuring investors have the clarity and transparency needed to protect their investments.
Going forward, both Bitfinex and Tether are committed to complying with all relevant federal, state, and international laws and regulations. The companies have also stated that they will continue to support aggressive regulatory oversight and audit requirements and stay committed to working towards greater financial transparency. Finally, Bitfinex and Tether have also stated that they will donate a total of $18.5 million to a number of financial crimes enforcement nonprofits.
