actually bitfinex 'dun goofed' they thought by using tether they didnt have to follow al fiat regulations.
but because tether is a 1:1 pegged currency to fiat, it is deemed as a 'virtual/e-money' representation of fiat' and thus still has to abide by fiat regulations..

much like paypal dollars in their mysql database is not real fiat, it is 'virtual/e-money representation of fiat'

bitfinex withdrew its complaint against wells fargo because they realised they 'dun goofed' and wouldnt win against wells fargo