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Crypto Insiders weigh in on Tether (USDT) Debacle As Accused Exchange Moves 20% of Bitcoin (BTC) Trading Volume

As the crypto course market responds to a 23-page report published by the New York Attorney General's Office, claiming that digital field trading platform Bitfinex has committed gross fraud, crypto insiders are weighing in on whether or not these claims came to light. good, bad or terrible for the cryptosphere.

The lawsuit accuses Bitfinex's encryption exchange intentionally misleading the audience. According to the report, it continued to do business with New York companies and used third-party payment processors to fulfill client requests to pay fiat since it had "no trusted bank that could or would work with it."

"Because Bitfinex and Tether allow customers to deposit and withdraw US dollars in exchange for virtual currency, companies hold huge bucks on US dollars and must maintain relationships with banks that can reliably hold funds and process client deposits and withdrawals, including banks who can operate in the United States and want to serve US people. "

" According to documents delivered to the OAG by Respondents, and based on statements from the Advisor for Respondents for OAG Attorneys. The Bitfinex leader the reason why funds totaling $ 851[ads1] million could not be returned to Bitfinex was because the funds were seized by the authorities of Portugal, Poland, and the United States, based on statements by the Respondent's two OAG lawyers, respondents do not believe in Crypto Capitals representations that the funds have been seized. "

AG claims that Bitfinex knew that the third-party partner Crypto Capital, which controlled $ 850 million in funds, refused or failed to process withdrawals or return funds.

The scams included tweets, blog posts and other communications with investors to address serious issues.

"Similarly, October 15, 2018. Bitfinex published a message to the market stating that it is important for us to clarify that: All cryptocurrency and fiat withdrawals are and have been treat as usual without the slightest disruption. All fiat (USD. GBP. JPY, EUR) withdrawals are processed and have been as usual. "

The same day on the alert, an older Bitfinex manager made an urgent charge to Crypto Capital to release funds. He wrote "please help" to no avail.

The exchange, owned and operated by iFinex Inc., headquartered in Hong Kong and registered in the British Virgin Islands, denies any misdemeanor.

Morgan Creek Digital Co-founder Anthony Pompliano puts a pin in the entire scandal and some worry that the New York Attorney General's actions will have a widespread or lasting impact on Bitcoin or crypto and tweeting that the news is not significant.

Caitlin Long, a Wall Street veteran, crypto enthusiast and gubernatorial employed by the Wyoming Blockchain Task Force, emphasizes that she is "stunned" by the allegations and what she calls a double standard.

She tweeted

"STUNNED but not surprised news out of I will let other cryptolowers analyze it, but here are two macro thoughts: (1) There is a big double standard here. (2) Exchanges, cleansed your action – cryptographic evidence of your solvency. [19659003] First, the double value Why not throw the NY AG Martin Law on Merrill Lynch to do something that is actually quite similar to 2009-12? Seriously, why double the standard ?? Quote SEC's press release here: /news/pressrelease/2016-128.html …

"The maneuver released billions of dollars a week from 2009-12 that Merrill Lynch used to finance his own trading activities. Had Merrill Lynch failed in the midst of these industries, the company's customers would have suffered a massive shortage of the reserve account. "

WAIT – PLEASE STOP AND READ IT AGAIN  19 . It's very important. So … Merrill Lynch commented on customer resources, used them to cover their own obligations, and had failed that customers would have suffered a "massive shortage of the reserve account." Where was NY AG?

But it's more! Merrill held $ 58bn / day (!) of customer records in an account subject to the credit line. "Had Merrill Lynch collapsed at any time, customers would have been at considerable risk and uncertainty about getting back their own securities."

Yes, the Merrill material was pretty poor and it paid a $ 415mm fine for the SEC in 2016. But the SEC handled it in a way that did not kick off sudden panic and customer withdrawals from Merrill. But today, went with "gotcha" approach and pockets of panic seem to

So … did good research work here but needs to be called to task on why double standard and why "gotcha" approach? Why not do the same to firms when they play similar shell games?

Second point- exchange, clean up your action! You must really voluntarily disclose (h / t ), and Revised Accounts h / t [19659341] wtogami ). If you do not, regulators, investors and litigation will force it on unfavorable terms! "

Founder and CEO of crypto investment firm Onchain Capital and host of the Crypto Trader show on CNBC Africa, says Ran NeuNer is positive because it will wash away bad actors. asks how Bitfinex approved the relationship with a partner who could keep his $ 850 million.

"Discard my ignorance, but how do you give a company $ 850m to process payments on your behalf without any real due diligence / guarantees in place? "

ShapeShift CEO Erik Voorhees says that the missing millions, while bad news for Bitfinex, shows that USD backing Tether existed.

Following the Attorney General's claims were traded on Bitfinex shot up by 284%, according to CoinMarketCap, before they dropped to -16.57%, at the time of writing.

Crypto Exchange by Trade Volume

Trading volume tracker Bitcoinity shows that the exchange now represents a majority of Bitcoin trading volume of over 20%.

Total 24-hour Bitcoin Trading Volume
Source: Bitcoinity

In an official response to the claims, Bitfinex says it is cooperative and compatible, and encourages AG to assist with the recovery of the current $ 850 million.

"Bitfinex and Tether have been fully cooperative with the New York Attorney General's office, as both companies are with all regulators. The New York Attorney General office will focus its efforts on trying to help and support our recovery efforts."

According to AGs Office,

"Neither Bitfinex nor Tether is registered for service of process in New York.

Bitcoin is currently up .82% to $ 5,270, at writing time.

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] Disclaimer: Opinions expressed in The Daily Hodl are not investment advice. Investors should do their due diligence before making high risk investments in Bitcoin, cryptocurrency or Digital Assets Please note that your transfers and trades are at your own risk and any loss you may incur is your responsibility Daily Hodl does not recommend the purchase or sale of crypt Bugs or digital assets, and The Daily Hodl is not an investment advisor either. Please note that The Daily Hodl is participating in affiliate marketing.

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