(2021)
CFTC v. Bitfinex and Tether
Year
2021
Criminal or Civil
Civil (Regulatory Enforcement)
Year Resolved
2021
Jurisdiction (Court/State)
CFTC Administrative Proceeding (Washington, D.C.)
Filed By
Commodity Futures Trading Commission (CFTC)
Penalty/Fine (USD)
$41 million (Tether) + $1.5 million (Bitfinex) = $42.5 million
Lawsuit Overview
The CFTC charged Tether Holdings Limited and affiliates for misleading claims that USDT was fully backed by U.S. dollars and failing to disclose material facts about its reserves. Bitfinex was charged separately for engaging in illegal off-exchange commodity transactions and violating terms of a 2016 CFTC order. Both firms settled, agreeing to pay a combined $42.5 million in penalties.
Category
Misrepresentation, Commodity Fraud, Unregistered Operations
Notable Individuals Involved
Rostin Behnam (Acting Chairman, CFTC at the time)
Vincent McGonagle (Acting Director of Enforcement, CFTC)
No individual executives at Tether/Bitfinex were named in the order
Investor Loss Estimate
Not directly specified; damages were regulatory in nature rather than restitution for individual investor losses.
Final Outcome
Settled; both parties agreed to pay penalties and cease further violations. Bitfinex was also ordered to implement preventive systems.
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