Former Commodity Futures Trading Commission Chairman Calls for More Stablecoin Regulations, or Cryptocurrencies created to bind other assets such as fiat money
Timothy Massad, who led the commission during the Obama administration’s second term, told CNBC’s Jim Cramer that investors would benefit from greater transparency following Tether Limited’s settlement with the New York Attorney General’s Office in the United States. February
Tether Limited is the company that issues tether, the most valuable stablecoin and the third most valuable cryptocurrency after bitcoin and ethereum.
“We need a better regulated framework for tether and other stablecoins,” Massad, a senior at Harvard̵7;s Kennedy School of Public Administration, said Wednesday on “Mad Money.” “We need a better framework. so that we can assure you that no such action will be taken.”
Tether and related firm Bitfinex have agreed to settle an $18.5 million dispute with prosecutors to close an investigation into allegations that Ifinex-owned companies moved to cover $850 million in losses.
The New York Attorney General accused the company of misrepresenting the state of its reserves during 2018 and 2019 as companies Admitting to not doing anything wrong, Tether was ordered to disclose quarterly backup data. It produced its first report in March.
The March report revealed an unclear use of the money invested in the coin. According to the report, Tether holds 13 percent of its assets in secured loans and 15 percent in trade documents or unsecured short-term debt, Massad said.
“We don’t know what kind of loans they are or who they belong to,” and “we don’t know what kind of paper they are buying,” he said. So I think we need more disclosure here.”