coincentral-main-menu-search-eyeglass
Hamburger X.

Major Exchange Site Bitfinex and Tether Subpoenaed by U.S. Regulators

bitfinex tether subpoena

Bitfinex and Tether Under Fire

  • Bitfinex and Tether say this is a routine “legal process” with a no comment policy
  • Tether damaged relationship with auditors and failed to certify $2.3 billion in reserves

 

According to Bloomberg, the U.S. Commodity Futures Trading Commission delivered subpoenas on Dec. 6 to major exchange site Bitfinex and digital asset firm Tether, sister companies that share a CEO.

While the exact contents of the subpoenas are unknown at this time, regulators are questioning whether or not Tether, a broadly traded token supposedly backed by the value of the U.S. Dollar, truly has these backings in reserve.

“The company has yet to provide conclusive evidence of its holdings to the public or have its accounts audited” stated Bloomberg. In an email to the news giant, Bitfinex and Tether said: “we routinely receive legal process from law enforcement agents and regulators conducting investigations…it is our policy not to comment on any such requests.”

Tether scam tweet

Effect on the Market

As allegations in the matter continue to surface in the media, the price of Bitcoin fell more than $1000 to nearly $10,000, its lowest since November. Many in the industry have been questioning the authenticity of Tethers reserve holdings for quite some time, with critics citing that unraveling the true “scam” of Tether could drive the price of Bitcoin down nearly 80%.

bitcoin price drop tether scam

A “Final Tether Consulting Report”  compiled by accounting firm Friedman LLP shows that Tether held roughly $443 million in various bank accounts on Sept. 15. At the time, Tether tokens were valued around $420 million, according to CoinMarketCap. However, the names of the actual banks these funds were supposedly in are concealed and Friedman LLP did not examine the accuracy of Tethers records.

Tether said in a statement  “given the excruciatingly detailed procedures Friedman was undertaking for the relatively simple balance sheet of Tether, it became clear that an audit would be unattainable in a reasonable time frame.”

As of Tuesday, roughly $2.3 billion worth of Tether are outstanding, and Friedman LLP no longer works with Tether.

NEWSLETTER

Newsletter (Sidebar)

  • This field is for validation purposes and should be left unchanged.

RELATED ARTICLES

Cobinhood Featured Image

What is Cobinhood Coin (COB)? A Beginners Guide

Cobinhood – A Zero Trading Fee Cryptocurrency Exchange Say hello to Cobinhood, a cryptocurrency exchange that charges zero fees for trading. Yes, you heard that right, zero! With a cheeky take on the Robinhood theme, Cobinhood has decided to move in…

Read More
bitcoin energy

What is the Environmental Impact of Bitcoin Mining?

Bitcoin has radically changed the payment model for worldwide transactions. So far in 2018, the number of transactions has ranged between the 150 000 and 400 000 per day level. But now, as more and more people worldwide start using…

Read More
digital money

Do We Really Need Cryptocurrency? – A Modern Exploration of Money

A number of leading businessmen and economists have questioned the need for cryptographic currencies over traditional fiat (paper) ones. Bitcoin, the first decentralized cryptocurrency, was largely created as a response to and rose to popularity as a result of the…

Read More

NEXT ARTICLE

Getting Started Gold Bars.

NEXT ARTICLE

Quantum Computing | Bitcoin’s Doomsday Maker

Quantum computing has the potential to end Bitcoin’s security as we know it. Learn more about the super-frozen computers and their threat to crypto.

ABOUT THE AUTHOR

Getting Started Gold Bars.

ABOUT THE AUTHOR

Erin is a Brooklyn based cryptocurrency enthusiast & writer. Nomad at heart, you can often find her at the airport heading to her next adventure.