News from New York could also be partly responsible for the recent price losses. In future, residents of the fourth-largest US state in terms of population will no longer be allowed to trade on the world’s largest crypto exchange Bitfinex or use the stablecoin Tether. It’s the result of an agreement between the companies behind Bitfinex and Tether and the New York Attorney General. Tether is often used when buying or selling Bitcoin and other cryptocurrencies.
The attorney general of the state of New York, Letitia James, has reached an agreement with the operator of the world’s largest crypto exchange Bitfinex and the stablecoin provider Tether after several years of litigation over allegedly illegal trading activities. As part of the settlement, the companies behind Bitfinex and Tether have agreed to no longer offer their services to residents of the state of New York. Both companies also have to pay a fine of $ 18.5 million and provide more transparency, according to a press release from the Attorney General.
The stablecoin Tether is issued by the company Tether Limited.
The y also need to take a number of steps to increase transparency, “said the New York attorney general’s press release.
So so-called stablecoin, Tether is linked to the value of the US dollar. Allegedly, each tether unit is backed by exactly one US dollar. However, this promise was not kept, according to the allegations of the state of New York. Tether was used to cover up losses of $ 850 million. Critics have long claimed that the stablecoin tether is also used to manipulate the price development of Bitcoin and other cryptocurrencies.
“Bitfinex and Tether have ruthlessly and unlawfully hidden massive financial losses to keep their machinations going and protect their bottom line“said Attorney General James.” Tether’s claim that their virtual currency was fully backed by US dollars at all times was a lie.
The se companies masked the real risk investors were exposed to and were operated by unlicensed and unregulated individuals and companies operating in the darkest corners of the financial system. This resolution makes it clear that those who trade in virtual currencies in New York State who believe they can circumvent our laws cannot and will not, “the attorney general said.
The agreement reached with the New York judiciary could kick off more regulation of cryptocurrency trading elsewhere. For example, US Treasury Secretary Janet Yellen recently spoke out in favor of stricter regulation of cryptocurrencies. As the agreement now reached in New York shows, trading in Bitcoin and other crypto currencies could also be significantly restricted by the state without an explicit ban on crypto currencies.