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Bitfinex Allegedly Covers $850 Million Loss With Tether Funds

Apr 26, 2019👎Bearish

The New York Attorney General's office has alleged that crypto exchange Bitfinex lost $850 million and subsequently used funds from affiliated stablecoin operator Tether to secretly cover the shortfall, according to an announcement published on April 25.

Bitfinex allegedly took not less than $700 million from Tether's reserves and used the funds to hide losses and inability to handle clients' withdrawals.

Attorney General Letitia 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.

Furthermore, the Attorney General is seeking an injunction to compel Bitfinex and Tether to continue trading, so as not to harm customers.

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