Bitcoin and Tether have been closely related since time immemorial, but the recent string of events pushed the price of Bitcoin down by 9% in about 3 hours. This has caused a domino effect, causing the price of other altcoins to fall as well.
The New York State Attorney General is suing Bitfinex and the closely affiliated firm, Tether, responsible for the infamous stablecoin, USDT. According to Yahoo, NY AG released a 23-page document which suggested that the AG has reason to believe that there might be a fraud being carried out by the two companies in cahoots with each other.
Yahoo stated that among other things, Tether and Bitfinex are engaged in, “undisclosed, conflicted transactions to cover Bitfinex’s losses, approximately $850 million, by transferring money out of tether reserve funds.”
Tether and Bitfinex aren’t completely unaware of their problems in trying to retain banks for their business and the allegations of Bitcoin’s 2017 pump was fueled by Tether and Bitfinex. Bitcoin’s prices took a nasty fall after the news broke out. However, the prices have recuperated partially since then. Bitfinex too did not waste time with its rebuttal to the New York AG’s charges.
Bitfinex’s rebuttal stated that New York’s AG released the order without giving the parties proper “notice or hearing” and that the Attorney General was attempting to “compel Bitfinex and Tether to provide certain documents and seek certain injunctive relief.” The same rebuttal was released by Tether.
The blog further stated,
“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.”
Bitfinex stressed that they were actively exercising their rights to get the stated funds released. It also added that the New York State Attorney General’s office seemed to be intent on undermining Bitfinex’s efforts, to the detriment of Bitfinex’s customers.