New York shuts cryptocurrency exchanges which hid losses

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Two crytpocurrency trading platforms that were hiding hundreds of millions of dollars in losses agreed to cease operations following an investigation by New York state officials

New York state authorities said they had reached an agreement to cease the activities of two cryptocurrency trading platforms that were hiding losses estimated at $ 850 million.

Attorney General Letitia James said the deals with Bitfinex and Tether this week would end all trading activities with New Yorkers and result in fines totaling $ 18.5 million.

James’ office began investigating the two companies in 2017 on their trading in “stablecoins,” which are designed to maintain real dollar value.

The investigation found that the two companies made false claims about support for the “Tether” stablecoin and the movement of hundreds of millions of dollars between the two companies to cover losses.

“Bitfinex and Tether have ruthlessly and illegally covered massive financial losses to keep their program going and protect their bottom line,” said James.

“Tether’s claim that its virtual currency was fully backed by US dollars at all times was a lie. These companies masked the real risk investors were exposed to and were operated by unlicensed and unregulated individuals and corporations, who operated in the darkest corners of the financial system. “

The companies agreed to cease all trading activities with New Yorkers and to submit to mandatory reporting on core business functions.

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© 2021 AFP

Quote: New York closes cryptocurrency exchanges, hiding losses (2021, February 24) posted on February 26, 2021 from https://techxplore.com/news/2021-02-york-cryptocurrency-exchanges-hid- losses.html

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