Cryptocurrency exchange Bitfinex has reached a settlement with New York Attorney General (NYAG) Letitia James, after 2.5 years and 2.5 million pages of information, over the allegations that it hid the loss of $850 million commingled client funds.

Bitfinex didn’t admit or deny any wrongdoing, and agreed to pay $18.5 million, said the state attorney general’s office in a statement on Tuesday.

This settlement should be “viewed as a measure of our desire to put this matter behind us and focus on our business,” said Stuart Hoegner, general counsel at Bitfinex and Tether.

The crypto community celebrated the news, calling this a huge buying opportunity, and after the deep sell-off, the market is now recovering.

“A decidedly Bullish outcome to a saga that began in April 2019,” noted HXRO Labs. Given that Tether FUD has been persistent in the market through all these years, this settlement puts it to an end and legitimizes Tether by requiring transparency reports.

“This settlement is a great outcome for Tether/Bitfinex & the crypto industry at large,” noted Jake Chervinsky, general counsel at Compound Finance. “It does send a strong signal that, after so much discovery, NYAG was ready to move on,” he added.

Based on the amount of tether bellyaching I heard from the largest pools of instit capital, this is the best news possible. Nominal settlement and most importantly *ongoing reserve attestations*

Can’t overstate how much of a derisking event this is

— nic carter (@nic__carter) February 23, 2021

Just last month, Bitfinex said it repaid the remaining balance of $550 million and interest on the loan that was the center of the attorney general’s allegations of fraud.

New York officials that began investigating Bitfinex in 2019 will be receiving quarterly reports on the composition of Tether’s reserves for the next two years.

Talking about the reckless and unlawful cover for financial losses, Attorney General James said Tether’s claims of being fully backed by US dollars at all times “was a lie.” She said their action against the crypto company is sending the message that they,

“Will stand up to corporate greed whether it comes out of a traditional bank, a virtual currency trading platform, or any other type of financial institution.”

The agreement between iFinex and NYAG requires both Bitfinex and Tether to discontinue any trading activity with New Yorkers, and of course, submit regular reports.

As for the transparency report, the companies have to submit mandatory reporting on core business functions, including proper segregation of corporate and client accounts, segregation of government-issued and virtual currency trading accounts by company executives, and transfers of assets between and among Bitfinex and Tether entities.

Tether is also asked to offer public disclosures of the assets backing USDT and provide greater transparency. Both Bifinex and Tether stated,

“Contrary to online speculation, after two and half years, there was no finding that Tether ever issued tethers without backing, or to manipulate crypto prices.”

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