On October 15, the Commodity Futures Trading Commission (CFTC) fined sister companies Tether and Bitfinex for violating the Commodity Exchange Act or the CEA and a previous CFTC regulation fines of $ 41 million and US $ 1.5 million, respectively Dollar off.
Regulators have determined that Tether, the company behind a stablecoin of the same name, only has enough fiat reserves to support the dollar-pegged asset during the 26-month reporting period from 2016 to 2018. The agency also stated that Tether was breaking the law by holding some of its reserves in non-fiat financial instruments, as well as creating working capital and reserves.
In a simultaneous action, the watchdog for commodity futures transactions with Bitfinex has settled fees for the facilitation of “illegal goods retailing, foreign exchange trading in technical assets with Americans” on its platform, in addition to its activity “as a futures commissioner or FCM, without the” required registration. “
In a unanimous statement, CFTC Commissioner Dawn Stump backed the move, expressing concern that the deal could give stablecoin users a false sense of comfort as they could end up falsely arguing that the CFTC regulates stablecoins and oversees their issuers.
While the CFTC has adopted a broad definition of “commodity” for stablecoins in the present case, Stump has prevented the Commission from regulating the asset class and has “daily insight into the stablecoins business”. Issuers of stablecoins.
Tether issued a refutation and stressed that it always “has sufficient reserves”. The company stated its decision to settle it because it was ready to “solve this problem in order to move forward and focus on the future”.