ShapeShift CEO Erik Voorhees made a valid observation on Twitter today, pointing out that there’s some degree of irony in the charges potentially facing embattled Bitcoin exchange Bitfinex: Tether had the cash reserves, despite wide speculation that the company had issued far more crypto tokens than it could settle.
The New York attorney general alleges that Bitfinex – historically one of the largest Bitcoin exchanges – doesn’t have access to some $850 million Tether tokens and that it’s probably guilty of fraud as a result. The AG has demanded that Tether turn over documents to the State of New York, which includes materials that some traders may be uncomfortable with: full records on all traders who live in New York, and complete records on people who hold Tether and are believed to reside in New York.
Bitfinex denies most of the claims by New York. The company stopped exclusively offering Tether last year, and Tether changed its practices regarding withdrawals not long after. Crypto insiders have long suspected that all was not right with Tether Limited, the company which backs and issues Tether. The USD-pegged cryptocurrency remains the most significant and oldest stablecoin by market capitalization, with over 1 billion units in circulation. Unlike TrueUSD, Paxos Standard, and USDC.