[balefrost]

The NY Attorney General successfully prosecuted the parent company of Tether and Bitfinex. They found that the two were sharing funds, transferring them back and forth to make it appear that Tether was fully backed while using the same funds to prop up Bitfinex (after they lost coins, maybe in a hack?)

https://ag.ny.gov/press-release/2021/attorney-general-james-...

That doesn't necessarily mean that Tether's assets are less than its debts. I don't know the details. I just know that the NY Attorney General finds their activities to be shady.

[smoovb]

The outcome was a $18.5 settlement with no admission of wrong doing. If there was really shady activity, would NYAG disclose it?

[balefrost]

They did disclose it; it was in the press release:

In the case of Tether, the company represented that each of its stablecoins were backed one-to-one by U.S. dollars in reserve. However, an investigation by the Office of the Attorney General (OAG) found that iFinex — the operator of Bitfinex — and Tether made false statements about the backing of the “tether” stablecoin, and about the movement of hundreds of millions of dollars between the two companies to cover up the truth about massive losses by Bitfinex.

also

Tether’s claims that its virtual currency was fully backed by U.S. dollars at all times was a lie.

The settlement also bars Tether from trading with New Yorkers, and the must submit regular reports about their compliance with this prohibition.

I suspect the AG got what they wanted, they just managed to do so without taking time in the court system. I would assume that Tether realized that it wasn't worth trying to defend themselves and so agreed to settle. My use of "successfully prosecuted" might not have been the right way to phrase it.

[smoovb]

Remember the NYAG wording is going to biased in their favor.

Reading between the lines - there was a period in the past where Tether was not fully backed. If Tether was still, as of today, not fully backed, would NYAG conclude this case?

I suspect the AG thought it had a bigger case involving ongoing fraud but settled as it could not find evidence of any ongoing false claims.

While biased in Tether's favor, worth a read: https://tether.to/en/stress-tests-resiliency-and-bank-runs/

[RugnirViking]

If there was no shady activity, would tether pay a $18.5 million settlement for no reason?