Bitfinex and Tether Undergo Hefty Prices in the Prosecution Started by the New York Attorney General
The cryptocurrency exchange Bitfinex and the founding company of the cryptocurrency Tether have both come under prosecution by the New York regulators. The prosecution is led by the State of New York Attorney General. The reason the Attorney General of New York has made a lawsuit against these two companies is that they are both suspicious of breaking U.S. federal laws.
The cryptocurrency exchange Bitfinex and the founding company of the cryptocurrency Tether have both come under prosecution by the New York regulators. The prosecution is led by the State of New York Attorney General.
The reason the Attorney General of New York has made a lawsuit against these two companies is that they are both suspicious of breaking U.S. federal laws.
First off, let’s start with Tether. This cryptocurrency which is technically speaking a stablecoin, meaning a cryptocurrency whose value is stable and unchanging relatively speaking, is being used by different entities in the world to smuggle millions of dollars into different countries, especially those that have strict regulations against doing so and those that are sanctioned by the United States.
One case that was recently revealed is the misuse of this cryptocurrency by Chinese importers in Russia who send up to 30 million dollars’ worth of Tether to China every day, which is basically the same as sending actual dollars to China.
But why is Bitfinex involved in this case? Bitfinex, a cryptocurrency exchange company whose headquarters are located in Hong Kong, is known for having had so many mishaps and losing millions of dollars of its customers’ assets in different incidents.
Recently, Bitfinex was faced with a shortage of funds to pay its customers. This shortage was allegedly around $850 million. Bitfinex already had a bad reputation in handling people’s assets, so this would be a very heavy blow to this company. Therefore, Bitfinex reached out to Tether.
Bitfinex requested the founding company of Tether to issue 850 million dollars’ worth of Tether so that Bitfinex would be able to pay its customers.
However, the office of the Attorney General of New York believes that they did not offer the needed documents to do such a thing.
This is where their legal battle begins. The office of the Attorney General of New York requested both Bitfinex and Tether to submit all the documents necessary and any document requested by this office.
But this handing over of documents has not been as simple as one might imagine. The two companies have so far employed more than 60 experienced lawyers and spent more than 500 thousand dollars just to gather the documents requested by the office of the Attorney General of New York. The reason is that the two companies use various messaging platforms for their communications. Messaging platforms that implement highly sophisticated encryption algorithms. Therefore, accessing even one message would take some heavy computation and effort.
However, the lawyers of the two companies stated that no customer has sustained or will sustain any loss from this lawsuit. Tether users can still purchase Tether and redeem them each for one U.S. dollar. And users of Bitfinex can use this cryptocurrency rest assured that their assets are going to be safe.
Although, this case is not closed yet and lawyers are waiting to hear more from the judge of this case.