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Tether slapped with $41 million fine for 'untrue or misleading statements' on fiat currency backing

Tether slapped with $41 million fine for 'untrue or misleading statements' on fiat currency backing

Stablecoins
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Tether was fined $41 million by the CFTC for "untrue" statements when it came to its fiat currency backing.




The agency found Tether only held sufficient fiat reserves to back USDT tokens for only 27.6% of the days during a sample period.




CFTC also discovered Tether relied on unregulated entities and third parties to hold their funds.




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Tether on Friday was slapped with a $41 million fine by the US Commodity Futures Trading Commission for "untrue or misleading statements" when it came to the fiat currency backing of its stablecoins.The companies behind the famous stablecoin misrepresented the truth to its customers from June 1, 2016, to February 25, 2019, by saying it had sufficient US dollar reserves to back every Tether or USDT token when, in fact, it had not, the agency said in a statement Friday.Instead, the CFTC discovered that the companies only held sufficient fiat reserves in their accounts to back USDT tokens in circulation for only 27.6% of the days in a 26-month sample time period from 2016 through 2018.Additionally, Tether relied on unregulated entities and third parties to hold the funds comprising the USDT token reserves, according to the CFTC.
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