Tether Settles New York Lawsuit For $18.5 Million – Is XRP Settlement Next?

0

Last Updated on 23 March 2021 by CryptoTips.eu

Jeroen Kok

Jeroen is one of the lead copywriters on Cryptotips.eu and discusses all recent events in the crypto market. This includes news updates, but also price analyzes and more. He developed his passion for cryptocurrency during the bull run in 2017. He has learned a lot since then. The combination of cryptocurrency and creative writing is perfect for Jeroen and an excellent way to share his knowledge with a wide audience. Find me on LinkedIn / jeroen@cryptotips.eu
View all posts

Donald Rumsfeld, the former Defense Secretary of the US during the Bush-Cheney administration, once admitted to journalists that the Pentagon would often times bring out a press release in the midst of a world disaster, in order to make sure that the news would be buried on page 9 or so of the New York Times. That way, nobody cared that they “spent 20 million on a plane that couldn’t fly.”

In other words, make sure you use the moment when everybody is looking left to throw out the garbage from your car on the right.

New York Attorney General Letitia James must have followed that logic when she announced yesterday, just as crypto markets saw a massive correction, that crypto firm Bitfinex and the organization behind stablecoin Tether have found a settlement with her office for the legal dispute that started in the summer of 2019.

Advertentie.

$18.5 million for an $850 million accusation

The New York AG press release read:

Bitfinex and Tether recklessly and unlawfully covered-up massive financial losses to keep their scheme going and protect their bottom lines.

Tether’s claims that its virtual currency was fully backed by U.S. dollars at all times was a lie. These companies obscured the true risk investors faced and were operated by unlicensed and unregulated individuals and entities dealing in the darkest corners of the financial system.

In the words of the crypto commentators that became: Tether paid $18.5 million to settle a long running dispute after being accused of secretly covering up $850 million, money that Bitfinex lost to payment processor Crypto Capital.

Tether commented via a spokesperson:

Under the terms of the settlement, we admit no wrongdoing. The settlement amount we have agreed to pay to the Attorney General’s Office should be viewed as a measure of our desire to put this matter behind us and focus on our business. We are pleased that our customers have shown loyalty and commitment to our businesses over the past two years, while this investigation was ongoing.

Summarized it means a small payment for firms that make these amounts in a week.

Cryptofan Anthony Pompliano said in response:

Tether was accused of creating digital dollars backed by nothing to prop up Bitcoin’s price, while we watched the Federal Reserve create $4 trillion backed by nothing to prop up asset prices. The irony is unfathomable.

Bury your opponent in documents

Then again, it is also possible that the strategy that Bitfinex and Tether followed, namely to bury the Attorney General in documents (they provided 2.5 million of printed sheets of paper) is a good one.

With XRP now in court against the SEC, perhaps a strategy for CEO Brad Garlinghouse to follow. Then again, not sure if Treasury Secretary Janet Yellen would allow the US Finance Department to settle both major crypto court cases without some sort of American Hollywood-styled drama this year.

Roubini reaction?

NYU’s Stern School of Business economics professor and known crypto basher Nouriel Roubini had been shouting to all that wanted to hear that the Tether lawsuit, the stablecoin which he believes is being used to manipulate the price of Bitcoin, would cripple the crypto market.

Although he gave a long and winding interview to Yahoo yesterday, the man, who’s also CEO of Roubini Macro Associates, once again called Bitcoin a bubble, but did not comment on the Tether settlement.

hello.artmagination.com / Depositphotos.com