The NYAG showed that Tether was not fully backed.
In 2017, when they were busy securing other banking partners due to accounts being shutdown.
I consider this a gap due to growing pains, as did the NYAG. How would you shutdown Tether temporarily (2-3 months) if a bank ends a relationship?
By refusing to take deposits for new Tether, and by shutting down redemptions if necessary while the banking relationship is sorted out.
Tether doesn't exist ex nihilo; it requires active management to issue and redeem coins. If it ever cannot live up to its "fully backed" claim, then continuing to operate under a pretense is fraudulent.
I agree and expect that is the lesson the $18M fine taught them.
The key point is, they had a legitimate reason for under-collateralizing during the biggest bull run in crypto history at that point. 2014-2017 was the perfect period to begin fraudulent activity if they were really interested in it.
I guess the question is, what is the best time to commit fraud in the crypto space, earlier or later (during-post increased regulatory scrutiny)?
When I see that a company founded by criminals has lied, I tend to assume that they will be lying again. I think that is a fairly safe bet.
This was while they did have a banking relationship. What was the exscuse then?