Bitcoin and other cryptocurrencies recovered partially from their biggest sell-off in a month after the New York state attorney general’s office announced a settlement of a dispute involving the stablecoin tether (USDT) that had rattled market confidence in recent weeks.
Prices for bitcoin, the largest cryptocurrency by market value, jumped to $49,000 after the announcement, having hit lows below $45,000 earlier Tuesday. As recently as Sunday, bitcoin had pushed to a new record high above $58,000.
“After 2.5 years and 2.5M pages of info shared, we admit to no wrongdoing and will pay US$18.5M to resolve this matter,” Bitfinex tweeted, adding that no finding states that Tether ever issued [the stablecoin] without backing or to impact crypto prices.
According to trader and analyst Alex Kruger, the settlement news is bullish for bitcoin, decentralized finance, and Bitfinex’s LEO token.
Analysts at JPMorgan warned last week that a sudden loss of confidence in tether – a stablecoin widely used to fund cryptocurrency purchases – would pose risk to the crypto market stability.
In April 2019, the New York prosecutors had accused Bitfinex of using Tether’s funds to cover up the loss of $850 million in customer and corporate funds held by a payment processor.
