Bitfinex Drama Continues As NYAG Demand Transparency

Leticia James NYAG

New York Prosecutors Demand Transparency From Bitfinex and Tether

As the Bitfinex Drama Continues, the crypto community has been laser-focused on the existing problem between Bitfinex exchange and New York prosecutors over the supposed loss of $850 million of the co-mingled customer and corporate funds. After the craziness last week, the New York Attorney General’s (NYAG) office has actually now demanded that Bitfinex should exhibit their transparency by turning over files tied to the company Tether.

Also read: Bitfinex Drama Deepens

NYAG Wants Bitfinex Disclose Tether Documents

Crypto Scoop News recently reported on the NYAG court documents that implicate the cryptocurrency exchange Bitfinex of losing $850 million and using the stablecoin firm Tether to satisfy the loss. The Bitfinex drama and Tether story has continued into its second week with the NYAG office and the Attorney General Letitia James demanding Bitfinex release records concerning the Tether incident. The current filing discusses that the NYAG office believes Bitfinex has actually had ample time to deal with the situation and the agency wants all pertinent files that explain how Tether played a part in this ordeal.

NYAG Memorandum sent to bitfinex on May 4
NYAG Memorandum sent on May 4.

“We’ve given you much latitude to resolve these situations and months beyond your original estimates, we need to have more transparency now,” the NYAG filing detailed.

“While that and other inconsistencies do not change the core concerns in this case, that Bitfinex and Tether misinformed their clients and financiers, they only heighten the OAG’s requirement to obtain files and details in a prompt, organized fashion so that the OAG might understand what has transpired, and what continues to take place, at these businesses.”

After the NYAG filing, Bitfinex reacted by describing that the initial injunction filed recently cannot be asserted and the NYAG office will “not prosper on the merits.” Additionally, Bitfinex noted that “there were no continuous scams, and no ‘victims'” and the NYAG should establish some sort of grounds for authority, in order to petition the business in this fashion.

Bitfinex response to memorandum
Bitfinex responded to the memorandum by saying there are no victims and there’s no fraud happening. Bitfinex argues that the initial injunction “would not safeguard anyone, however, would instead trigger a tremendous interruption to Bitfinex and Tether.”

An Initial Exchange Offering and CMC Removes the Bitfinex BTC Price From Its Weighted Average

The last few days have likewise exposed that during this Bitfinex drama they might try to raise $1 billion through an initial exchange offering (IEO). Zhao Dong, a Bitfinex investor, told journalism on May 1 that the IEO organizers may provide 1 billion tokens that will cost $1. Zhao likewise claimed that $500 million were currently subscribed and qualified investors will have the ability to participate. Additionally, Zhao runs a financing platform called Renrenbit and supposedly the company has actually been preparing to begin pre-orders for the IEO token, called LEO.

Bitfinex Initial Exchange Offering

Currently, Bitfinex has actually not verified the IEO or the pre-sale of LEO on the platform Renrenbit. If it does occur, it won’t be the first time Bitfinex has actually issued a considerable token sale, as it launched an equity exchange token in October 2016 in reaction to the exchange breach that occurred two months prior. Bitfinex released 20 million BFX tokens and its chief system officer, Philip Potter, said at the time that the company’s “main goal has been to make our clients whole.” recently removed the Bitfinex BTC price

In addition to the current filing from the NYAG office, the response from Bitfinex, and the purported IEO pre-sale, the BTC/USD premium on the exchange is still much higher than average. At press time, the price per BTC on Bitstamp is $5,652 but on Bitfinex the price per coin is $6,023. The Bitfinex BTC cold wallet still holds roughly 89,404 BTC or $514 million and hasn’t altered much since May 1. The wallet had initially dropped from 120,000 BTC to 89,404 in only a few days after the April 24 injunction.

The Bitfinex ETH cold wallet had also decreased by 40% lately according to the exchange’s ETH-based cold wallet data. Since the exchange rate during this Bitfinex drama has been in between 5-8% greater than the typical spot price, depending on the hour, cryptocurrency information site just recently dropped the Bitfinex BTC price from the total aggregated international average. It’s safe to say this saga is not over yet and will unquestionably continue to reveal more in the days to come.

What do you think about the situation between the NYAG, Bitfinex, and Tether? What do you think about Coinmarketcap’s decision to exclude the BTC/USD exchange rate from Bitfinex from its weighted average?

Image credits: Bitcoin.Com, Pixabay, Shutterstock, Scribd, Pacer, and

The Post: New York Prosecutors Demand Transparency From Bitfinex and Tether appeared first on Bitcoin News.

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