Bitfinex, Tether respond to New York prosecutors' allegations, Tehter prices fall to around $0.99

On April 25, news from the New York Attorney General's (NYAG) office said that cryptocurrency exchange Bitfinex used funds from stablecoin operator Tether to make up for its losses of up to $850 million. Bitfinex and Tether responded to this, saying that their accusations were full of “false assertions.”

In news released on Thursday, New York Attorney General Letitia James said she had obtained a court order requiring iFinex, which operates both Bitfinex and Tether, to stop breaking New York laws and defrauding New York residents.

Letitia James said an investigation by her department showed that iFinex “covered up a loss of $850 million, which included customer funds and company funds.” She also claimed,

“New York State is leading the way in requiring virtual currency businesses to operate in accordance with the law. We will continue to stand up for investors and give them justice when they are misled or deceived by these companies.”

According to the statement, Bitfinex sent $850 million in customer and company funds to payment processor Crypto Capital, then used funds from Tether reserves to cover the deficit, but neither the loss situation nor Tether's capital flow were disclosed to customers.

Later the same day, Bitfinex issued a statement saying,

“The New York Attorney General's court documents are maliciously written and are full of false assertions, including what he says the company's “loss” of $850 million in Crypto Capital. Instead, we've told you that these crypto funds aren't lost; they're just collateralized and kept. We have been actively working to exercise our right to remedy and release these funds. Regrettably, the New York Attorney General's Office seems intent on undermining our efforts.”

It also stated that Bitfinex and Tether have “fully cooperated with the New York Attorney General's Office” because both companies will cooperate with all regulators. And the New York Attorney General's Office should “focus on helping and supporting our recovery efforts.”

The spread of this news affected both Bitfinex and Tether to varying degrees. According to comparative data, the price of Tether fell to around $0.99, down 1.57% in 24 hours.

Image source: pixabay

Author Liang CHE

This article is from Comparative Intelligence. The source must be indicated for reprinting.