Bitfinex — $850 Million Loss Allegation Was Made in ‘Bad Faith’

Cryptocurrency exchange, Bitfinex has quickly moved to quash claims by the U.S Attorney General’s office that the crypto firm took $850 million from the Tether stablecoin cash reserve to hide losses.

In a release published April 25, Attorney General Letitia James said had obtained a court ordering Bitfinex and its subsidiary, Tether, which issues the USDT stablecoin to stop breaking New York laws.

Their offence according to the court order is that iFinex, the firm operating, Bitfinex collaborated with Tether to gain access to up to $900 million of fiat money which is used to back the stablecoin’s issuance to members of the public.

The order also claims that Bitfinex used $850 million from the fund which was passed through Crypto Capital Corp without any written contract, to hide their losses and incapability to pay for user withdrawals on their exchange.

To write the wrong, the Attorney asked Bitfinex to produce investigation documents offering insight into the alleged operation and also avoid destroying any material that could provide information about it.

Bitfinex Responds to Allegations

Following the regulator’s publication of the court order, Bitfinex said in its defence that the findings were “riddled with false assertions, including as to a purported $850 million “loss” at Crypto Capital.”

Regarding the funds at crypto capital, Bitfinex said the funds are not lost, and they (Bitfinex) are actively working on getting those funds released.

Bitfinex also suggested that instead of undermining their efforts to recover the funds, the Attorney General’s office should focus on trying to aid and support the recovery process.

Meanwhile, we reported earlier that Tether’s stablecoin (USDT) is migrating to the TRON blockchain despite the issues currently surrounding the company.