Tether Limited, the company behind the largest stablecoin currently in existence, will have to pay a $ 41 million fine issued by Commodity Futures Trading Commission (CFTC) of the United States. The company, this is the reason for the provision, has in fact lied about the consistency of its reserves guaranteed by law. The subsidiary of Tether,exchange di cryptocurrency Bitfinex, in turn, was fined $ 1,5 million. In this case for carrying out “illegal over-the-counter retail commodity transactions in digital goods”. A measure that not only obliges us to reconsider the reliability of the company, but which seems destined to rekindle the controversy of a part of the policy against digital assets.
Tether, an extremely controversial resource
Tether is an extremely controversial resource and has long been the subject of bitter controversy. If the company claims that the digital assets it issues are backed by US dollars, its detractors say it is a pure and simple lie.. A thesis, the second, which is naturally destined to draw force from the sanction issued by the CFTC.
The commission, in fact, claims that Tether has provided false claims about the guarantee funds. In particular, in the period between 1 June 2016 and 25 February 2019, the Tether coins were not fully covered by US dollars for most of the time frame considered.
What the CFTC claims
The order issued by the CFTC is very precise in its accusation. The commission found that Tether failed to include unsecured claims and non-legal assets in its reserves. It's still, claimed something absolutely false, namely that she was subjected to routine professional checks aimed at demonstrating that they have maintained 100% reserves at all times. From the press release, however, we learn that Tether's actual reserves have never been verified. In fact, the company held sufficient legal reserves in its accounts that could only hold up tokens in circulation for only 27,6% of the days over the 26-month period from 2016 to 2018.
Finally, according to the commission, unregulated entities and third parties were used in these operations, so as to be able to hold funds. A series of practices absolutely devoid of transparency and destined to weigh heavily on the company's reputation.
The reasons for the sanction against Bitfinex
As it regards instead Bitfinex, CTFC argues that the platform was sanctioned for engaging in illegal merchandise transactions in the period from the first day of March 2016 until at least 31 December 2018. In practice, the exchange would have allowed US citizens to buy and sell Bitcoin and Tether without having made the necessary registration with the body.
In the margin of the press release, Rostin Behna, acting chairman of the commission, stated his intention to continue his fight against all malpractice or misleading practices that could have an impact on the markets that fall under his jurisdiction.
Tether, the controversy is around the corner
After the CFTC provision, the controversy over Tether and stablecoins in general is naturally destined to revive. Cryptocurrencies pegged to the dollar have long been accused of not having the reserves to guarantee each token issued. Thus putting those who decide to use it at risk. Accusations that have always been thrown back, but which now prove to be absolutely true.
It remains to be seen how the political who have never hidden their allergy to monetary innovation. Which could soon go on the attack asking for restrictive measures as much as possible.