Bitfinex exchange promises to vehemently fight allegations of Tether (USDT) $850 million cover up

The cryptocurrency community is ending the week in shock following reports of Bitfinex exchange covering up for an $850 million shortfall in its issued Tether (USDT) stablecoin. Investors reacted across the board as the prices plummeted considerably. The New York Attorney General’s office, which has been looking into the matter involving Bitfinex and Tether as the two companies to avail specific documents.

The New York AG’s office says that the exchange utilized illegal transactions to cover up to $850 million funds that were missing. According to the filing, the funds were removed from USDT’s reserves. Bitfinex used the funds to pay users who were requesting for withdrawals.

“The situation looks bad. We have more than 500 withdrawals pending and they keep coming in … [T]oo much money is parked with you and we are currently walking on a very thin crust of ice…BTC could tank to below 1k if we don’t act quickly.”

The investigation into the matter began in 2018 and started by seeking documents and information from third parties that had at one pint worked with Bitfinex. However, Tether has responded to the filings saying that it was going to strongly oppose the claims:

“Both Bitfinex and Tether are financially strong – full stop. And both Bitfinex and Tether are committed to fighting this gross overreach by the New York Attorney General’s office against companies that are good corporate citizens and strong supporters of law enforcement. Bitfinex and Tether will vigorously challenge this and any other actions by the New York Attorney General’s office.