New York shutting down cryptocurrency trading platforms that hid millions in losses

New York’s attorney general has reached a deal with two cryptocurrency trading platforms to shut down all business in the state and pay nearly $20 million in damages after the two firms hid hundreds of millions in losses.

A statement from the office of Letitia James (D) on Wednesday said that the cryptocurrency platforms Bitfinex and Tether would be forced to end all transactions with New York residents and pay a combined $18.5 million in fines after hiding roughly $850 million in losses around the world.

The two companies offered a service referred to as “stablecoins,” or cryptocurrency backed by a set U.S. dollar value. James said in her press release that the companies’ claims of a guaranteed set value for the stablecoins was fraudulent.

“Bitfinex and Tether recklessly and unlawfully covered-up massive financial losses to keep their scheme going and protect their bottom lines,” she said. “Tether’s claims that its virtual currency was fully backed by U.S. dollars at all times was a lie.”

“These companies obscured the true risk investors faced and were operated by unlicensed and unregulated individuals and entities dealing in the darkest corners of the financial system. This resolution makes clear that those trading virtual currencies in New York state who think they can avoid our laws cannot and will not,” James continued.