Bitfinex & Tether Respond: We are “Financially Strong”, Will “Fight” NY AG’s “Gross Overreach”
The New York Attorney General Office in a statement on Thursday alleged that Bitfinex lost $850 million and as a coverup used customer and corporate funds from the USDT stablecoin operator Tether.
“The issue is not printing tethers to manipulate bitcoin, but Bitfinex having funds “stolen” and then using Tether's funds,” said economist and crypto trader Alex Kruger.
Letitia James, the state's top prosecutor has accused Bitfinex, Tether and the associated entities of violating the New York law by indulging in activities that may have included defrauding crypto investors in the state. Per the court filings, the cryptocurency exchange took hundreds of millions of dollars from Tether’s reserves to hide from investors and further conceal its ability to process the withdrawals of clients.
TL:DR the Tether/Bitfinex news:
Bitfinex have borrowed ~700mil from Tether
Bitfinex pay a 'fair' interest rate on this loan
60million shares in Bitfinex were pledged as collateral
If CryptoCapital release the USD, no problem
If Bitfinex trades profitably, no problem
— Alistair Milne (@alistairmilne) April 25, 2019
In response, Bitfinex released its statement where it states the order released by New York Attorney General’s office has been without notice and hearing and further written in “bad faith” that is riddled with “false assertions”.
Both the companies claim they are “financially strong” while talking about the alleged $850 million loss, it says the funds are, in fact, “seized and safeguarded” and Bitfinex is working to exercising its right to get those funds released.
"Bitconnect is strong financially. There's nothing to worry about" – Bitconnect founder circa 2017 https://t.co/AKsS8CUvIP
— Squeeze (@cryptoSqueeze) April 26, 2019
“Both Bitfinex and Tether are committed to fighting this gross overreach by the New York Attorney General’s office against companies that are good corporate citizens and strong supporters of law enforcement. Bitfinex and Tether will vigorously challenge this, and any and all other actions, by the New York Attorney General’s office.”
Today's NYSA lawsuit against Bitfinex be the relevant background to understand why the Tether terms & conditions were changed last month. https://t.co/0bncbFIWfH
— Tuur Demeester (@TuurDemeester) April 25, 2019
Just last month the stablecoin Tether has announced that each USDT token is not pegged by only cash equivalents and may include other assets and receivables from loans made by Tether to third parties as well.
Don't let anyone tell you that the selloff is due to expiration. The selloff happened as soon as the Bitfinex news came out, and expiration has been in effect all day. Clearly investors are spooked.
— MAGIC (@MagicPoopCannon) April 26, 2019
A fall in Bitcoin and cryptocurrency market followed this news as at one point the flagship cryptocurrency dropped $5,527 to $5,182. Though it recovered slightly as it shifted upwards to $5,378, BTC/USD remains below $5,200 on Bitstamp.
At the time of writing, the leading cryptocurrency has been trading at $5,270 with 24-hours loss of 3.92 percent, as per Coinmarketcap data.
Tether has also fallen off its peg as it takes a drop of 1.74 percent, currently, trading at $0.98.
Altcoins followed Bitcoin and the total market cap slid down back to $167 billion at one point. Currently it is at $170 billion while BTC dominance is at 54.7 percent.
Among the top cryptos, Cardano lost the most by 6.43 percent followed by Ethereum and Bitcoin Cash that are down more than 5 percent. Litecoin and Tron are down the least at just below 2 percent followed by XRP which is in the red by 2.67 percent while Binance Coin is the only one in green by 1.39 percent.
Live Bitcoin (BTC) Price:
1 BTC/USD =$43,497.4917 change ~ 7.36%