Bitwise Crypto Index to Remove Bitfinex From Contributing Price Indices Citing NY AG Concerns
After the controversy around Tether (USDT) and Bitfinex regarding the funds that the company was handling, the Bitwise Crypto Index Committee held a meeting on April 25 in which they decided to ban Bitfinex from contributing price indices.
Bitfinex to Stop Contributing to Price Indices
The negative effects of the controversies around Tether and Bitfinex continue to affect the crypto exchange. The Bitwise Crypto Index Committee has recently held a meeting regarding the claims raised by the New York Attorney General’s claims towards both Btifinex and Tether.
According to a recent notice of the meeting that was published by Bitwise on its website, the New York Attorney General retained a court order against iFinex Inc, which is the owner of Bitfinex and Tether. Apparently, Bitfinex used around $700 million from Tether’s reserves to cover up to $850 million in losses.
In this way, the committee decided to vote 100% against Bitfinex, resulting in the ban of the company from being able to contribute to price indices.
The committee commented about it:
“[A company that can contribute to indices] is in compliance with local regulations and not subject to extraordinary regulatory or legal action. This requirement exists to limit exchange to those that are positive actors in the community, and to limit the potential for interruptions in service or unusual pricing due to the government or regulatory enforcement actions.”
As per the committee, this decision to ban Bitfinex from price indices is not going to affect price discovery in any meaningful way. At the same time, it is not expected for this decision to affect access to liquidity. However, the intention is to move towards a more cautious situation.
At the time of writing this article, Bitfinex is the 34th largest digital asset exchange in the market with a trading volume in the last 24 hours of $531 million, according to CoinMarketCap.
Tether is also the largest stablecoin in the space with a market capitalization in the market of over $3 billion. This is the highest valuation that the digital asset had in history, even after all these issues around it. This makes Tether one of the largest cryptocurrencies and the most traded virtual currency in the market.