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Bitcoin (BTC) stumbles as New York Attorney General accuses Crypto Exchange Bitfinex and Tether of Massive Cover-up

Bitcoin dropped almost 6% after a few minutes after New York's lawyer Allitat's Letitia James accused Bitfinex's crypto exchange to attend a coverup to hide a $ 850 million loss. According to a 23-page legal filing, Bitfinex worked with a company in Panama to process payments. However, having given $ 850 million to Crypto Capital, Bitfinex could not retrieve its funds. That's when AG says the exchange turned to cash reserves that support the Tether stall. Tether is a controversial stabilcoin that has long been thought to be created by the owners of Bitfinex. The coin is designed to be tied 1: 1 with the US dollar, giving crypto dealers a way to escape from the fleeting crypto market by buying a coin that won't win or lose value. According to the application "According to advice for Bitfinex and Tether, Bitfinex began in 201 4 a relationship with a (thought to be) Panamanian entity called Crypto Capital Corp. (Crypto Capital) to function as one of its" payment processors "to OAG by the respondents, by 2018, Bitfinex had invested over one billion dollars of merged customer and corporate funds with Crypto Capital." AG claims that Bitfinex used Tethers cash reserves to pay customers who requested withdrawal of fiat from the exchange. "Our survey has shown that the operators on the trading platform" Bitfinex ", which also controls the virtual currency" Tether ", has engaged in a coverage to hide the obvious $ 850 million loss of merged customers and corporate funds.…

Bitcoin dropped almost 6% after a few minutes after New York’s lawyer Allitat’s Letitia James accused Bitfinex’s crypto exchange to attend a coverup to hide a $ 850 million loss.

According to a 23-page legal filing, Bitfinex worked with a company in Panama to process payments. However, having given $ 850 million to Crypto Capital, Bitfinex could not retrieve its funds.

That’s when AG says the exchange turned to cash reserves that support the Tether stall.

Tether is a controversial stabilcoin that has long been thought to be created by the owners of Bitfinex. The coin is designed to be tied 1: 1 with the US dollar, giving crypto dealers a way to escape from the fleeting crypto market by buying a coin that won’t win or lose value.

According to the application

“According to advice for Bitfinex and Tether, Bitfinex began in 201

4 a relationship with a (thought to be) Panamanian entity called Crypto Capital Corp. (Crypto Capital) to function as one of its” payment processors “to OAG by the respondents, by 2018, Bitfinex had invested over one billion dollars of merged customer and corporate funds with Crypto Capital.”

AG claims that Bitfinex used Tethers cash reserves to pay customers who requested withdrawal of fiat from the exchange.

“Our survey has shown that the operators on the trading platform” Bitfinex “, which also controls the virtual currency” Tether “, has engaged in a coverage to hide the obvious $ 850 million loss of merged customers and corporate funds.

The New York State has led virtual currency companies to operate under the law, and we continue to stand up for investors and seek justice on their behalf when misled or deceived by any of these companies. “ [19659002] Attorney General James requests that Bitfinex and Tether cease operations in New York.

In June last year, a law firm was hired to look for Tethers financial solvency. The stack is fully backed by real US dollars held in two bank accounts.

“Each tether is always 100% backed by our reserves, which includes traditional currency and cash and may from time to time include other assets and claims on loans that Tether grants to third parties, which may include related entities (collectively) Each seal is also 1 to 1 linked to the dollar, so 1 USDT is always valued by Tether to 1 USD. “

But in March, Tethers website was updated quietly to indicate that the coin’s reserves may of assets other than US dollars, which is a major departure from the original claims that Tether is 100% backed by USD.

The accusations of Advocate James had immediate market impact, with Bitcoin almost lost

The leading crypto curve has recovered at the time of publishing and is currently at $ 5,264, 3.91% over the past 24 hours.

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