New York Prosecutors Allege Bitfinex Used Tether's Funds to Cover $850 Million

[CoinCodex]

The New York State Attorney General is alleging that cryptocurrency exchange Bitfinex has lost access to $850 million of co-mingled corporate and customer funds after transferring them to “Crypto Capital Corp.”, a Panama-based entity.

Read more:

https://coincodex.com/article/3492/new-york-prosecutors-allege-bitfinex-used-tethers-funds-to-cover-850-million-loss/

[rijaljun]

This was the bad news that causes Bitcoin lost their value around $300 USD last night. I personally can't believe this kind of bad news is happened on a positive market. Like just a few days ago Bitcoin price increased to from 5500 USD to 5700 USD then go back because of this news.

I hope the problem will be fixed as soon as possible and we know clearly what happened to Bitfinex so that Bitcoin price will be back to green color.

[dunfida]

This was the bad news that causes Bitcoin lost their value around $300 USD last night. I personally can't believe this kind of bad news is happened on a positive market. Like just a few days ago Bitcoin price increased to from 5500 USD to 5700 USD then go back because of this news.

I hope the problem will be fixed as soon as possible and we know clearly what happened to Bitfinex so that Bitcoin price will be back to green color.

Any negative news would always be a candidate when it comes to price dumps or increases where these fundamentals do really give significant impact anytime on the price.

But with this news, we are talking about Tether here.

[Kemarit]

This was the bad news that causes Bitcoin lost their value around $300 USD last night. I personally can't believe this kind of bad news is happened on a positive market. Like just a few days ago Bitcoin price increased to from 5500 USD to 5700 USD then go back because of this news.

I hope the problem will be fixed as soon as possible and we know clearly what happened to Bitfinex so that Bitcoin price will be back to green color.

What problems are you saying here? I don't see any problems for Bitcoin as this is a Tether case. And this can drag for years. The market is unpredictable anything can happen in a blink of an eye. Just like what we have seen in the last 24 hours. The price suddenly goes down very quick, then rebounded and then when the other side of the globe is awake, the dump continues. Anyways, I'm still positive that the price won't go below $5000, there is a strong buying support and this whole drama can be forgotten because the market is already in a bullish mood.

[mr.relax]

Tether affects Bitcoin price. Its very easy, Tether is the biggest stable coin and used by many exchanges, almost all.
So if Tether is tumbling, all tumbles.

Bitfinex is one of the biggest exchanges. If Bitfinex fails, a huge lot of coins will be gone. Actually they cannot payout the amount that should be inside, thats why they borrowed from Tether.
But now Tethers value is not 1USDT=1USD. Actually its only 80cent worth, whatever the market may show now.
You may call Tether now a scam.

So it affects Bitcoin in many ways.

Sure its not BTCs problem, its a problem of a huge centralized unregulated exchange and a huge centralized and unregulated coin...Not good...

Just remember the time when MtGox failed. Sure, it was not Bitcoin that failed, but the priced went down very deep and long time...
Good news is, Bitfinex is not as dominant in the market as MtGox was...

[wxa7115]

This was the bad news that causes Bitcoin lost their value around $300 USD last night. I personally can't believe this kind of bad news is happened on a positive market. Like just a few days ago Bitcoin price increased to from 5500 USD to 5700 USD then go back because of this news.

I hope the problem will be fixed as soon as possible and we know clearly what happened to Bitfinex so that Bitcoin price will be back to green color.

If anything what it is happening now should benefit bitcoin, many people decide to use tether as a way to store their value when the price of bitcoin is going down or when they want to stay out of the market but now that the most popular stable coin is under such a scrutiny then it is likely we are going to see many people dumping that coin, some of them will decide to use other stable coins but many will decide to buy bitcoin and get away from stable coins for sometime and as we know when the demand goes up the price goes up as well.

This explains why in the bitfinex exchange the price of getting one bitcoin is more expensive than in many other exchanges and if bitfinex is not holding the amount of bitcoin they are supposed to hold they could during the next months stop withdrawals, and such an event will really have a chance to make the price of bitcoin to drop.

[CryptoReggae]

This was the bad news that causes Bitcoin lost their value around $300 USD last night. I personally can't believe this kind of bad news is happened on a positive market. Like just a few days ago Bitcoin price increased to from 5500 USD to 5700 USD then go back because of this news.

I hope the problem will be fixed as soon as possible and we know clearly what happened to Bitfinex so that Bitcoin price will be back to green color.

If anything what it is happening now should benefit bitcoin, many people decide to use tether as a way to store their value when the price of bitcoin is going down or when they want to stay out of the market but now that the most popular stable coin is under such a scrutiny then it is likely we are going to see many people dumping that coin, some of them will decide to use other stable coins but many will decide to buy bitcoin and get away from stable coins for sometime and as we know when the demand goes up the price goes up as well.

This explains why in the bitfinex exchange the price of getting one bitcoin is more expensive than in many other exchanges and if bitfinex is not holding the amount of bitcoin they are supposed to hold they could during the next months stop withdrawals, and such an event will really have a chance to make the price of bitcoin to drop.

this is a logical discourse. In the long term a possible stop to withdrawals will trigger the real panic, and the btc price could suffer serious consequences.

Unfortunately, few are aware of the risk

[slaman29]

The strangest thing to me in all of this is how it needed to take this much money for something like this to uncover. I mean we are talking about almost a billion dollars here, and on an exchange that we know has had so many issues in the past. I thought the regulators were already eyeing these guys so much, how is it they can still get away with all this so easily?

[vennali]

The strangest thing to me in all of this is how it needed to take this much money for something like this to uncover. I mean we are talking about almost a billion dollars here, and on an exchange that we know has had so many issues in the past. I thought the regulators were already eyeing these guys so much, how is it they can still get away with all this so easily?

One of the reasons is International Law. The exchange operates internationally. US doesn't have much in the game to take effort and shut them down. But now they do. Its no longer just millions of dollars, but Billions of dollars and potentially more in the future, hence they are stepping in. Also no one knows if they are trying to get away with it or the Prosecutor got this one wrong. IFinex, the company behind the exchange and tether did make a statement denying the allegations.

[TravelMug]

The strangest thing to me in all of this is how it needed to take this much money for something like this to uncover. I mean we are talking about almost a billion dollars here, and on an exchange that we know has had so many issues in the past. I thought the regulators were already eyeing these guys so much, how is it they can still get away with all this so easily?

Yes, I will also assumed that agencies have this on their radar for quite some time now. But we all know that it's unregulated and maybe they are just buying time and building a good case, air tight so that once they presented everything, Bitfinex can't just claimed that they're just legit and all accusations are baseless.

It's a long battle but I guess this time Bitfinex can't escape the full hands of the law.

In other news, bitcoin is about to reach $6,000. 

[carter34]

I have to say that as far we are yet to see a regulatory body to guide about regulation of business in crypto market and exchange, we are going to continue seeing such practice going on.  Such regulation would stop some illicit transactions from happening in the first place.

[CryptoBry]

I have to say that as far we are yet to see a regulatory body to guide about regulation of business in crypto market and exchange, we are going to continue seeing such practice going on.  Such regulation would stop some illicit transactions from happening in the first place.

I am highly convinced that there is now the need for a strong, solid and cut-clear regulatory framework that all cryptocurrency exchanges have to follow in order to protect the interest of the people who are trusting these entities. Right now, there is no more question that exchanges are getting to be more powerful and influential every day as they generate more revenues on global scale. Human nature remains the same whether one can be in traditional or the new financial platform so laws have to be made and implemented for all players. A good regulation on this market can boost more trust and confidence from investors and traders resulting into more vibrant and transparent business.