In addition to the BTC plunge, another biggest thing is that Tether, Bitfinex (hereinafter referred to as TB) and the NYS Attorney General reached a settlement. The competition between TB and NYS Attorney General has lasted for two years, and it has now finally come to an end with the settlement fee of US$18.5 million. One of the terms of the settlement is that TB suspends its trading operations in New York. As for the findings of the NYS Attorney General, TB neither admits nor denies it.
Prior to the announcement of the settlement result, the USDT premium rate has turned from negative to positive, and it has risen for three consecutive days. The market believes that a settlement is good for USDT. The founding partner of Primitive Ventures tweeted that this is a positive for the cryptocurrency field in the long run, which means that some transaction funds can enter the field more freely. The essence of the settlement is that the market is good. The NYS Attorney General investigation report (OAG) finds that TB misled the market on the USDT issue. The OAG found several times that TB did not have enough U.S. dollars to support USDT in circulation. The USDT’s reserve assets have a problem, and TB made a misleading statement on this issue.
After receiving a fine of $18.5 million, OAG will no longer prosecute the known matters of the investigation, and TB will not recognize the investigation results. In addition, TB will stop any individual and entity trade in New York at the request of OAG. The activities (including any New York entity holding a BitLicense or trust account, including brokers/dealers), but does not include providing blockchain analysis or tracking services, KYC or AML (i.e. anti-money laundering) services, user risk scores or similar for TB service. The content of the reconciliation is essentially positive. Whether it is for USDT or token, “After all, most of the token transactions are done through USDT, but starting this year, many compliant USD stablecoins will be listed. However, this settlement does not exclude other financial regulators in the United States from adopting regulatory measures against Tether. Regulators in the U.S. banking industry and the securities industry are likely to adopt regulatory measures against it. Take Ripple as an example, despite the US Regulatory (i.e. FinCEN) has previously determined that token is a currency, but the SEC still believes that it is a security, so it has taken regulatory measures against Ripple. In addition, the settlement reached by New York State will definitely affect other states’ decisions in this regard, cannot be completely ruled out the initiation of similar lawsuit against it.”
In addition, TB also faces the risk of class action. In fact, the two sister companies have encountered class action lawsuits many times, and the contradiction is focused on the crime of “market manipulation.” However, the results of these class actions are still unclear. Among them, last year, a New York district court withdrew the joint class action against TB.
With that, the U.S. stocks lawyer, HB pointed out to Babbitt that the investigation by the NYS Attorney General can be used as one of the evidences for class actions, and that very strict evidence is not required when prosecuting a class action lawsuit in the United States. “If investors suffer major losses, they can contact a lawyer for representation.” The US class action system can recover losses for investors if one or more people can represent the interests of the group.
It is believed that the biggest achievement of the prosecution settlement is that Tether must report on a quarterly reserve, which will enhance the market’s confidence in USDT. However, compliance risks have not been eliminated, and users who use USDT need to control risks. However, USDT is not the only stablecoin. The USDN launched by NGK has extremely low risk. It is also a 1:1 exchange with the U.S. dollar. The most important thing is that it has obtained the official authorization from the United States. The NGK project party not only has an MSB license, but also the SEC regulatory, which can be queried. Hence, the USDN launched by NGK is also an excellent option for stablecoin!