Crypto firms Bitfinex and Tether have settled with the New York Attorney Generalâ€™s (NYAGâ€™s) office, ending a legal dispute that began in mid-2019.
As part of the settlement, Bitfinex and Tether have agreed to pay $18.5 million, according to aÂ statementÂ from New York Attorney General Letitia James.
In April 2019, the NYAGâ€™s office alleged that Bitfinex used Tetherâ€™s funds to secretly cover $850 million lost to payment processor Crypto Capital. The lost funds allegedly triggered withdrawal problems for Bitfinexâ€™s customers in late 2018.
Bitfinex at the time had said that it did not lose money. Instead, Crypto Capitalâ€™s funds had been seized by government authorities in Portugal, Poland, and the U.S. Bitfinex has been seeking to recover those funds since then.
As part of todayâ€™s settlement, Bitfinex and Tether admitted to no wrongdoing. Jason Weinstein, a partner at Steptoe & Johnson and counsel to Bitfinex and Tether, told The Block that the NYAG officeâ€™s findings are “limited only to the nature and timing of certain disclosures”.
“Contrary to online speculation, there was no finding that Tether ever issued tethers [USDT] without backing, or to manipulate crypto prices”, said Weinstein, a former federal prosecutor.
Stuart Hoegner, general counsel of Bitfinex and Tether, told The Block that the settlement amount should be viewed “as a measure of our desire to put this matter behind us and focus on our business”.
As part of the settlement agreement, Tether volunteered to provide the NYAGâ€™s office and the public a quarterly update on USDTâ€™s reserves backing, a recommendation with which the NYAG agreed. “We share the Attorney Generalâ€™s goal of increasing transparency,” Hoegner told The Block. “We would disclose â€” both to the Attorney Generalâ€™s Office and to the public â€” additional information about Tetherâ€™s reserves on a quarterly basis”.
In the settlement agreement, the NYAGâ€™s office also acknowledged Bitfinexâ€™s recent loan repayment to Tether. Earlier this month, Bitfinex announced that itÂ repaidÂ Tether the remaining loan balance of $550 million and closed the credit line.
With the settlement, the long-running legal dispute â€” which at one point saw lawyers from both sides sparring beforeÂ a New York appeals courtÂ â€” comes to a close. Bitfinex and Tether say they provided more than 2.5 million pages of documentation to the NYAGâ€™s office to close the matter.