Tether fined $41 million on Stablecoin

The Commodity Futures Trading Commission ordered Tether, Friday, to pay a $41 million fine for “making misleading statements and omissions of material fact in connection with the U.S. dollar tether token (USDT) stablecoin.”

This case highlights the expectation of honesty and transparency in the rapidly growing and developing digital assets marketplace.

Stablecoins are cryptocurrencies whose aim is to remain stable and have low volatility. They can be pegged to a currency or a commodity, such as gold.

Since 2014, Tether has represented that the tether token is a stablecoin with its value pegged to fiat currency and 100% backed by corresponding fiat assets, including U.S. dollars and Euros.

The Commission says that from at least 1 June, 2016, to February 25, 2019, Tether misrepresented to customers and the market that Tether maintained sufficient U.S. dollar reserves to back every USDT.