Bitfinex Allegedly Uses Tether Funds To Cover $850 Million Loss

Crypto exchange Bitfinex has been reportedly using funds from affiliated stablecoin operator Tether in order to secretly cover its alleged loss of $850 million, as claimed by the  New York Attorney General’s office in an announcement published on April 25.

Attorney General Letitia James elaborated that her office obtained a court filing that alleges iFinex Inc., the operator of Bitfinex, Tether Limited, and their associated entities of being in violation of New York law for carrying out activities that may have defrauded New York-based crypto investors. James stated:

“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. And we will continue to stand-up for investors and seek justice on their behalf when misled or cheated by any of these companies.”

The filing stated that Bitfinex never revealed its losses to the investors. Reportedly, the executives of the exchange and Tether have been engaged in a series of conflicting corporate transactions wherein Bitfinex got access to up to $900 million of Tether’s cash reserves. Bitfinex used not less than $700 million from Tether’s reserves to hide losses and inability to handle clients’ withdrawals.

Reportedly, the court ordered the companies’ operators to immediately cease the dissipation of the United States dollars that back tether tokens and to produce investigation-related information and documents. Further, companies are prohibited from destroying potentially related documents.

Alistair Milne, a  crypto entrepreneur noted on his Twitter account that Bitfinex will pay a purportedly fair interest rate on what is, in effect, a loan. Additionally, 60 million shares of Bitfinex stock were traded as collateral. Furthermore, the Attorney General is seeking an injunction to compel Bitfinex and Tether to continue trading, so as not to harm customers.

Read more:Samsung SDS Introduces Nexledger Universal’s New Version

Image source – Stock Photo Secrets

Next Post
  • bitcoinBitcoin (BTC) $ 6,623.94 5.14%
  • ethereumEthereum (ETH) $ 137.07 3.83%
  • tetherTether (USDT) $ 1.00 0.14%
  • bitcoin-cashBitcoin Cash (BCH) $ 225.55 4.52%
  • binancecoinBinance Coin (BNB) $ 12.74 2.92%