Tech News, Magazine & Review WordPress Theme 2017
  • FEATURES
    • News
    • Bitcoin
    • Ethereum
    • Ripple and XRP
    • Altcoins
    • Trading
    • NFTs
    • Blockchain
    • Futuremash
    • Regulators
    • Scams
    • Crypto 101
  • HODLX
    • Latest Stories
    • FAQ
    • Submit Your Guest Blog
  • INDUSTRY ANNOUNCEMENTS
    • Latest
    • Press Releases
    • ChainWire
    • Sponsored Posts
    • Submit Your Content
  • CRYPTO MARKETS
    • Bitcoin (BTC)
    • Ethereum (ETH)
    • Binance Coin (BNB)
  • BEGINNERS
    • What Is Bitcoin?
    • What Is Blockchain?
    • What Does Hodl Mean?
    • How to Pay Your Bills with Bitcoin
    • Best Bitcoin FAQs
    • Example of Bitcoin’s Purpose
    • Cryptocurrency Has Multiple Meanings
    • Authenticator Alert – Securing Your Crypto
  • SUBMIT
    • Guest Blog
    • Press release
    • Sponsored post
  • EMAIL ALERTS
  • DAILY HODL MIX
No Result
View All Result
  • FEATURES
    • News
    • Bitcoin
    • Ethereum
    • Ripple and XRP
    • Altcoins
    • Trading
    • NFTs
    • Blockchain
    • Futuremash
    • Regulators
    • Scams
    • Crypto 101
  • HODLX
    • Latest Stories
    • FAQ
    • Submit Your Guest Blog
  • INDUSTRY ANNOUNCEMENTS
    • Latest
    • Press Releases
    • ChainWire
    • Sponsored Posts
    • Submit Your Content
  • CRYPTO MARKETS
    • Bitcoin (BTC)
    • Ethereum (ETH)
    • Binance Coin (BNB)
  • BEGINNERS
    • What Is Bitcoin?
    • What Is Blockchain?
    • What Does Hodl Mean?
    • How to Pay Your Bills with Bitcoin
    • Best Bitcoin FAQs
    • Example of Bitcoin’s Purpose
    • Cryptocurrency Has Multiple Meanings
    • Authenticator Alert – Securing Your Crypto
  • SUBMIT
    • Guest Blog
    • Press release
    • Sponsored post
  • EMAIL ALERTS
  • DAILY HODL MIX
No Result
View All Result
The Daily Hodl
No Result
View All Result

Bitcoin (BTC) Stumbles As New York Attorney General Accuses Crypto Exchange Bitfinex and Tether of Massive Cover-up

by Daily Hodl Staff
April 25, 2019
in Bitcoin

Bitcoin dropped nearly 6% in a matter of minutes after New York’s Attorney General Letitia James accused the crypto exchange Bitfinex of engaging in a coverup to hide a loss of $850 million.

According to a 23-page legal filing, Bitfinex worked with a company in Panama to process payments. After giving $850 million to Crypto Capital, however, Bitfinex was unable to retrieve its funds.

That’s when the AG says the exchange turned to cash reserves backing the stablecoin Tether.

Tether is a controversial stablecoin long thought to be created by the owners of Bitfinex. The coin is designed to be pegged 1:1 with the US dollar, giving crypto traders a way to escape the volatile crypto market by purchasing a coin that won’t gain or lose value.

According to the filing,

“According to counsel for Bitfinex and Tether, in 2014  Bitfinex began a relationship with a (believed to be) Panamanian entity called Crypto Capital Corp. (Crypto Capital'”) to act as one of their ‘payment processors.’ According to documents provided to OAG by Respondents, by 2018 Bitfinex had placed over one billion dollars of co-mingled customer and corporate funds with Crypto Capital.”

The AG alleges that Bitfinex used Tether’s cash reserves to pay customers who were requesting to withdraw fiat from the exchange.

“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.”

Attorney General James is demanding Bitfinex and Tether cease operations in New York.

In June of last year, a law firm hired to look into Tether’s financial solvency said the stablecoin is fully backed by real US dollars held in two bank accounts.

“Every tether is always 100% backed by our reserves, which include traditional currency and cash equivalents and, from time to time, may include other assets and receivables from loans made by Tether to third parties, which may include affiliated entities (collectively, ‘reserves’). Every tether is also 1-to-1 pegged to the dollar, so 1 USDT is always valued by Tether at 1 USD.”

But in March, Tether’s website was quietly updated to state that the coin’s reserves may at times be comprised of assets other than the US dollar, which is a major deviation from its initial claims that Tether is 100% backed by USD.

The accusations from Attorney General James had an immediate impact on the market, with Bitcoin dropping nearly 6% in a matter of minutes, from $5,526 to $5,197.

The leading cryptocurrency has rebounded at time of publishing, and is currently at $5,264, down 3.91% in the last 24 hours.

[the_ad id="42537"] [the_ad id="42536"]
Check Latest News Headlines


 
Disclaimer: Opinions expressed at The Daily Hodl are not investment advice. Investors should do their due diligence before making any high-risk investments in Bitcoin, cryptocurrency or digital assets. Please be advised that your transfers and trades are at your own risk, and any loses you may incur are your responsibility. The Daily Hodl does not recommend the buying or selling of any cryptocurrencies or digital assets, nor is The Daily Hodl an investment advisor. Please note that The Daily Hodl participates in affiliate marketing.
Submit a Press Release

Industry Announcements

  • Aurigami Collects $12 Million War Chest To Grow Aurora-Based Lending Protocol
    August 2, 2022
  • Impel Adds Bitcoin to ISO 20022 Financial Messaging on XDC Network
    August 2, 2022
  • Serenity Shield and Digital Insights Announce Strategic Partnership
    August 2, 2022
  • Crypto Platform Phemex Becomes Partner of Université Paris Dauphine – PSL To Support Research on DeFi and Cryptocurrency
    August 1, 2022
  • Open Loot Announces Partnership With Hit Factor’s War Park
    August 1, 2022
  • Post Voyager Partners With Ozys, Announces Plans for Multi-Chain Expansion
    July 29, 2022
  • First Decentralized Data Warehouse Space and Time Raises $10 Million Seed Round Led by Framework Ventures
    July 28, 2022
Submit a Guest Post
ADVERTISEMENT
Bitcoin
$23,347.26
$23,347.26
0.57%
Ethereum
$1,720.06
$1,720.06
0.18%
Cardano
$0.536226
$0.536226
3.4%
XRP
$0.376945
$0.376945
0.4%
Dogecoin
$0.069892
$0.069892
0.4%

Spotlight

  • Majority of US Adults With Income of $50,000 or Less Sold Crypto Holdings During Market Collapse: New Study
    August 2, 2022
  • Bitcoin (BTC) and Ethereum (ETH) To Be Policed by CFTC Under New US Senate Proposal: Report
    August 4, 2022
  • Analyst Says Altcoin That Just Rallied 200% Hasn’t Even Started, Predicts New All-Time Highs for Binance Coin
    August 7, 2022
  • Axie Infinity CEO Denies Rumors of Moving Millions of Dollars in AXS During Massive $600,000,000 Ronin Attack
    July 31, 2022
Finance Magnates London Summit Banner
DON'T MISS A BEAT
Crypto headlines delivered daily
to your inbox
BTC, ETH, XRP news alert options
By joining The Daily Hodl news list you agree to our
Terms and Conditions and Privacy Policy.
Featured Image: Shutterstock/Billion Photos

Cryptocurrency news and analysis, covering Bitcoin, Ethereum, Ripple, XRP, altcoins and blockchain technology

Categories

Bitcoin • Ethereum • Trading •
Ripple and XRP • Altcoins •
Blockchain • Regulators •
Scams • Crypto101 • HodlX •
Futuremash •
Industry Announcements

ABOUT US | EDITORIAL POLICY | PRIVACY POLICY
TERMS AND CONDITIONS | CONTACT

JOIN US ON TELEGRAM

JOIN US ON TWITTER

JOIN US ON FACEBOOK

COPYRIGHT © 2017-2022 THE DAILY HODL

No Result
View All Result
  • FEATURES
    • News
    • Bitcoin
    • Ethereum
    • Ripple and XRP
    • Altcoins
    • Trading
    • NFTs
    • Blockchain
    • Futuremash
    • Regulators
    • Scams
    • Crypto 101
  • HODLX
    • Latest Stories
    • FAQ
    • Submit Your Guest Blog
  • INDUSTRY ANNOUNCEMENTS
    • Latest
    • Press Releases
    • ChainWire
    • Sponsored Posts
    • Submit Your Content
  • CRYPTO MARKETS
    • Bitcoin (BTC)
    • Ethereum (ETH)
    • Binance Coin (BNB)
  • BEGINNERS
    • What Is Bitcoin?
    • What Is Blockchain?
    • What Does Hodl Mean?
    • How to Pay Your Bills with Bitcoin
    • Best Bitcoin FAQs
    • Example of Bitcoin’s Purpose
    • Cryptocurrency Has Multiple Meanings
    • Authenticator Alert – Securing Your Crypto
  • SUBMIT
    • Guest Blog
    • Press release
    • Sponsored post
  • EMAIL ALERTS
  • DAILY HODL MIX

© 2022 The Daily Hodl