Crypto CapitalThe lawsuit is being brought against iFinex Inc., which operates the Bitfinex cryptocurrency exchange and owns Tether Ltd. According to the lawsuit, Bitfinex made an effort to hide these missing funds so as to not bring unwanted attention. Unable to find a reputable bank to work with, the cryptocurrency exchange partnered with Panama-based Crypto Capital, through which Bitfinex mixed customer funds with its own capital. The lawsuit claims that the co-mingled funds with Crypto Capital totaled some $1B. According to the Attorney General, in October 2018, Bitfinex began to struggle with withdrawals because it had drained customer funds. With Crypto Capital holding the funds with no proper agreement, the funds were foolishly “lost” or, more likely, stolen by Crypto Capital. Bitfinex has not publically commented on the loss of funds in 2018.
Tether FUD Strikes Again!Although Tether had been scrutinized before, this is the first time a state probe has demonstrated that USDT was used to cover up fudged numbers and missing funds. Bitfinex has been embroiled in controversy before, such as when it suffered a high-profile hack in May 2015 when $72M was stolen. This time around, there’s a good chance the exchange may be forced to significantly downsize — or cease operations, completely — if found guilty. Do you believe Bitfinex will be found guilty? Are you surprised that Tether was supposedly used to cover up missing funds? Let us know your thoughts below.
All the information contained on our website is published in good faith and for general information purposes only. Any action the reader takes upon the information found on our website is strictly at their own risk.