Former CFTC chairman demands further regulation of tether and stable coins

Jun 11, 2021 0 comments

A former chairman of the Commodity Futures Trading Commission has called for tighter regulation of stable coins, cryptocurrencies created to peg other assets such as fiat currencies.

Timothy Massad, who headed the committee for most of the Obama administration’s second phase, told CNBC’s Jim Cramer that Tether Limited settled with the Attorney General of New York in February, making investors transparent. He said he could improve his sex.

Tether Limited is the company that issues Tether, the most valuable stable coin and the third most valuable cryptocurrency after Bitcoin and Ethereum.

“We need a better regulatory framework for tethers and other stable coins,” Masad, a senior researcher at Harvard Kennedy School of Government, told Mad Money Wednesday. “We need a better framework to ensure that we can’t do something like this.”

Tether and its affiliate Bitfinex have worked with prosecutors for $ 18.5 million to end an investigation into allegations that a company owned by Ifinex has transferred funds to cover a $ 850 million loss. Agreed to settle.

The Attorney General of New York claimed that in 2018 and 2019 the company misrepresented the status of its reserves. Both companies did not admit fraud, but Tether was ordered to submit a quarterly disclosure of reserves. I created my first report in March.

The March report revealed some opaque uses of money invested in coins. According to the report, Tether held 13% of its assets in secured loans and 15% in commercial paper or unsecured short-term loans, Masad said.

"I don’t know what kind of loan they are and who they are,” and “I don’t know what kind of paper they are buying,” he said. “It’s all a concern, so we need to disclose more here. I think there is."

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