Crypto posible Bombshell coming !!!

For some time in crypto world a question has been looming over the horizon : Is Bitfinex operating a stay alive scheme using Tether without having the reserves to back it up ?

Founded in 2015, Tether is connected to the online exchange Bitfinex. While the founders of that exchange had long insisted Tether was a separate entity the majority of investigations suggested otherwise. The most compelling evidence comes form Paradise Papers which suggest that Bitfinex's Chief Strategy officer, Philip Potter, along with its Chief Executive Officer, JL van der Velde, had worked with the law firm Appleby to established Tether in the British Virgin Islands sometime in 2014.

The obvious question is why would the connection between Bitfinex and Tether matter ?

It matters because Bitfinex is the exchange that handles the majority of BTC transactions by volume, and because Tether has become a substitute for fiat on all major exchanges.

This „close connection” stets the stage for a possible meltdown of the crypto world beyond any imagined proportion.

All these uncertainties started when Bitfinex was hacked and lost 72 million dollars of their customers money back in 2016. After the hack Bitfinex slowly paid back a small percentage of these with real money, but their main „solution” was to pay people back by selling equity in their exchange to all holding their debt tokens. In the end they sold roughly, around 50 million in equity and the rest of the BFX tokens were paid back with Tethers.

As if Bitfinex wasn't in the crapper already, a new problem came up. All major banks cut off their relationship with the exchange.

At this point everybody was wandering how and why is Bitfinex still alive.

Some, like Nouriel Roubini stated that Bitfinex /Tether manipulate BTC prices, basically pumping up while trying to re-acquire banking, ensuring that the price of BTC never falls so that new money is always trying to come into the exchange and they can process some withdrawals to keep some people happy.

Others like the cryptocurrency research community 1000xGroup argued Tether is creating tokens in response to market demand for bitcoin in order to manipulate the prices in their favor.

Bitfinex and Tether said that all questions posed where unfounded, based on FUD and the audits they ordered by third parties would prove that beyond any doubt. Bitfinex was supposed to have an audit by “Ledger Labs”, but this proved in the end to be a big fat lie. On the other side Tether was supposed to be audited by Friedman LLP, but again this never happened because the audit firm was undertaking „excruciatingly detailed procedures” for the relatively simple balance sheet.

Finally after all these issues where debated in the crypto community, the U.S. Commodity Futures Trading Commission sent subpoenas to Bitfinex and Tether in order to conduct investigations. The scope of these investigations is not known because CFTC declined to comment and elaborate on the procedures.

If all the speculation is correct about Bitfinex / Tether and their market manipulation the consequences of the fallout will be catastrophic for all cryptocurrencies.