The War of Words Between NYAG & Bitfinex - Tether Escalates
As previously mentioned here, there is quite a lot of bad blood between the New York Attorney General, and Bitfinex - Tether. The Attorney General exposed details of the $850 M frozen funds belonging to Bitfinex and the $900 M loan between Tether and Bitfinex. The Attorney General also uncovered that as a result of this loan, Tether broke its 1-to-1 pegged value promise. In fact, each Tether was only backed by 74% of a dollar. This is something that was not disclosed to the public or shareholders. In addition to that loan there is also a public $625 million loan from Tether to Bitfinex.
Bitfinex & Tether's Initial Response
Their response came quickly, in nearly identical posts both Bitfinex & Tether aired their grievances.
"The New York Attorney General's court filings were written in bad faith and are riddled with false assertions, including as to a purported $850 million "loss" at Crypto Capital. On the contrary, we have been informed that these Crypto Capital amounts are not lost but have been, in fact, seized and safeguarded."
The Attorney General responded back with some heavy hitting allegations.
The Attorney General claimed that Bitfinex used Tether's cash reserve as a personal piggy bank with bogus collateral. It seems that the Bitfinex - Tether fiasco will continue and head to court.
IEOs & LEO Token
The timing of Bitfinex's IEO seems to indicate deep cash-flow problems within the organization. Bitfinex's trading volume has dropped sharply as per coinmarketcap and is now #48 as per adjusted volume.
The fact that they are only accepting Tether makes it seem that they might be reorganizing their reserves.
Things seem to be escalating quickly between Bitfinex Tether and the New York Attorney General. Let's hope that the cryptocurrency world won't be a victim in that fight.
Written by Jonathan Ganor
Writer & cryptocurrency aficionado