Bitfinex Uses Tether Funds to Cover $850M Loss
Main page News, Tether, Cryptocurrency Exchanges, Stablecoins

According to the New York Attorney General’s office, Hong Kong-based crypto exchange Bitfinex has reportedly used Tether funds to secretly cover $850M loss.

NYAG's attorney general, Letitia James, announced that she had received a court order against Bitfinex operator iFinex Inc. as well as against Tether, ordering them to stop violating New York law and defrauding the city's investors. She said:

"Our investigation has determined that the operators of the ‘Bitfinex’ trading platform, who also control the ‘tether’ virtual currency, have engaged in a cover-up to hide the apparent loss of $850 million dollars of co-mingled client and corporate funds. New York state has led the way in requiring virtual currency businesses to operate according to the law."

According to available documentation, Bitfinex could have used USDT tokens to secretly cover its losses, as investors were never informed.

Why it is important

  • Tether is the world’s most popular stablecoin. According to its development team, every Tether is backed by 1 $. However, some members of the crypto community wonder whether this stablecoin is actually backed by US dollars at a 1:1 ratio.
  • Tether and Bitfinex have been accused by the crypto community of influencing on Bitcoin price. They claim that every time Bitcoin price changes drastically, Tether and Bitfinex carry out suspicious transactions.

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