The New York Attorney General Goes After Bitfinex and Tether

Here’s the news: The office of New York Attorney General Letitia James has officially obtained a court order to request iFinex Inc, the operator of bitcoin exchange Bitfinex and Tether, to cease operations in New York.

This is big news as Tether is the most popular stablecoin in the cryptoverse, doing over $10 billion daily recently.

But it’s not a surprise to those that regularly follow the crypto market. I last wrote about Tether (USDT) in October 2018 when it suspended fiat withdrawals.

Basically, the NY AG is accusing Bitfinex and Tether of hiding an $850 million loss.

Allegedly, Bitfinex used $700 million from Tether’s case reserves to cover up the loss. And it hid the operations from investors according to the NY AG.

Bitfinex denies the accusations, saying the funds were “not lost but have been, in fact, seized and safeguarded.”

You can see from the CMC chart below the entire crypto market is down on the news. And tether (USDT) is now trading at $1, although still above $0.99.

What happens from here is anyone’s guess.

I imagine Bitfinex will fight it tooth and nail.

In the meantime I’ll do what I’ve always done, avoid USDT.

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