NY Attorney General’s Office: Plenty of Funny Conduct in Tether, Bitfinex Amid Fake IEO White Papers

The NY Attorney General’s office (OAG) has recently submitted opposition on May 3 to Bitfinex’s motion to void the agency’s court order that affected the crypto market a few days ago. According to the OAG, citing the Martin Act in the opposition, gives power to the office to investigate the purchase, sale and exchange of securities and commodities. The OAG’s investigation showed evidence of fraudulent conduct.

Tether and Bitfinex In Trouble

According to the filing, the OAG has been analysing a series of business practices conducted by both Bitfinex and Tether. Some of the things that they have checked are related to the timing of tether issuance, the relationship between these firms and how they informed the backing of Tethers to investors.

Moreover, they have also checked how Bitfinex provided information regarding the transfer of Tether’s cash reserves in 2018. The report goes on by explaining that they have examined the ability to process client withdrawal requests and how senior executives are compensated.

The most important thing is related to the fact that Respondents fraudulently shifted Bitfinex’s risk of loss of several hundred million dollars onto Tether’s balance sheet. Nonetheless, they continued to represent to the market that tethers were fully backed by U.S dollars, even when they were not.

The OAG explained about the Martin Act:

“The Martin Act is designed to protect the public, and for the reasons expressed at length in this brief and in the OAG’s initial application for relief, the quities favour preservation of assets for the benefit of defrauded investors… it appears likely that defendants violated teh Martin Act, and the OAG is attempting to protect public interest in lawsuit.”

A recently released document shows that Bitfinex is planning to raise up to $1 billion in IEO, for a new Token called LEO. The intention is to use these funds to have liquidity during the process to recover $850 million in funds that have been frozen in three different countries: Poland, Portugal and the United States.

Fake Bitfinex Initial Exchange Offering (IEO) White Papers Start Circulating Online, Investor Beware


Also, according to a crypto media news outlet, a fake Bitfinex white paper is currently in circulation and has been delivered online in chatrooms and unofficial forums. This is deemed a new way to rid investors of their money, and people have since been warned about its likes by members of Bitfinex themselves.

As per a Bitfinex shareholder, Dong Zhao, has been quoted saying, “The white paper you all are seeing now is a fake one.” How are they able to tell this? It seems like Bitfinex’s original white paper has never been issued (at least not as of yet).

Upon investigating the fake white paper, Zhao revealed that the original token name is called, “LEO” and not “BFX”. On Saturday, May 4, Zhao took to his Twitter to actually share about the real native token, as opposed to what’s found in the phoney whitepaper. While it is not the original white paper per say, it is a summary of what can be expected of LEO in the time to come:

As for means of payment, only USDT is accepted and not the likes of Bitcoin [BTC] or Ethereum [ETH]. Coin Desk also revealed that the legitimacy of the white paper is questionable, especially considering the fact that certain claims made are overly risky and something that crypto exchanges would not attempt when dealing with regulatory aspects.

The fake white paper has been shared by John Biggs – who originally shared it on Scribd. Click here to take a closer look here. For those looking for more, here is the latest updates about the price of bitcoin:

Bitcoin’s price is $23,342.61 BTC/USD exchange rate today. The real-time BTC market cap of $446.41 Billion currently ranks #1 with a chart dominance at 62.37%, daily trading volume of $13.11 Billion and live coin value change of BTC -2.28 in the last 24 hours.

Live Bitcoin (BTC) Price:

1 BTC/USD =$23,342.6146 change ~ -2.28%

Coin Market Cap

$446.41 Billion

24 Hour Volume

$13.11 Billion

24 Hour VWAP

$23.75 K

24 Hour Change


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