Tether Under Threat? Bloomberg Posts Old News and Crypto Market Takes a Dive. Bloomberg's rehashed story on U.S. CFTC sending subpoenas to Bitfinex and Tether caused the crypto market to lose $27 billion in an hour.
Following the story, Bitcoin dropped under $10,000 once again (on some price indexes) and Tether also went down to $0.975. However, the story was updated an hour later, adding that the subpoenas were sent last month, on
Financial regulators sent out the subpoenas last week to Tether and Bitfinex, which shares the same CEO. A subpoena is like a court hearing.
Tether is for those who don't know called USDT and is pegged to and supposedly backed by the US dollar. It was created to function a stablecoin, that allows you to avoid the volatility of cryptos while still owning a crypto. A little bit like the idea behind SBD.
When Mt.Gox first halted customers withdrawals in 2014, it took more than two weeks before they admitted that hackers had stolen more than 450$ million. This crippled the entire crypto ecosystem.
Only a week ago we had the coincheck-hack where hackers left with more than 500$ million. But this time 500$ was not enough to stop cryptos from holding above 550 billion USD total mcap.
Now, Bitfinex is showing similar shady behavior, witholding critical information to customers.
As early as march reddit-users reported that their wire transfers were cancelled. And after that there has been problems with getting fiat assets out of the exchange.
More troubling still is that Bitfinex has so far refused to provide an audit of the fiat funds that allegedly backstop the tether float, despite promising that it would be "fully transparent and audited to demonstrate 100% reserves at all times" when it first launched the token.
This has lead some to speculate that the exchange could be commingling tether funds with other customer assets.
This will probably have a snowball effect, where people will overreact to the FUD. It doesn't matter that much if ONE exchange goes down today as in 2014. So be prepared for a market that can fall as much as 50%, and get your coins out of Bitfinex if you have any there.
