“Bitfinex and Tether are Financially Strong – Full Stop” So Says Finex

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Bitfinex, which may now be nicknamed the Iron Exchange, has denied allegations by New York Attorney General Letitia James who in a press release stated:

“Our investigation has determined that the operators of the ‘Bitfinex’ trading platform, who also control the ‘tether’ virtual currency, have engaged in a cover-up to hide the apparent loss of $850 million dollars of co-mingled client and corporate funds.”

News Corp’s WSJ then probably relied on this press release with their crypto reporter Paul Vigna stating in a headline: “Bitfinex Used Tether Reserves to Mask Missing $850 Million, Probe Finds.”

Bitfinex says “we have been informed that these Crypto Capital amounts are not lost but have been, in fact, seized and safeguarded.

We are and have been actively working to exercise our rights and remedies and get those funds released.

Sadly, the New York Attorney General’s office seems to be intent on undermining those efforts to the detriment of our customers.”

That the funds were seized is corroborated by the filed court document which states:

“According to documents provided to OAG by Respondents, and based on statements made by counsel for Respondents to OAG attorneys.

An individual at Crypto Capital told the senior Bitfinex executive the reason that funds totaling $851 million could not be returned to Bitfinex was because the funds were seized by governmental authorities in Portugal. Poland, and the United States.

Based on statements made by counsel for Respondents to OAG attorneys, Respondents do not believe Crypto Capital’s representations that the funds have been seized.”

As you all know, Bitfinex has been struggling with the banking system since about 2016 when CFTC fined them for offering unregulated margins.

The almost complete merger between the banking system and law enforcement was then shown shortly after when Wells Fargo, the corresponding bank, refused to serve any bank that dealt with Bitfinex presumably in order to enforce the above fine.

Since then Bitfinex has been playing a very complex game and so far – although with some troubles – it has been playing it fairly well in that the exchange does still stand.

Part of this game was using intermediaries to hide the fact the funds are coming from Bitfinex, including payment processors like Crypto Capital.

Then, on or around April 2017, it was revealed about €400 million was seized from a Polish bank (pictured above) used by Crypto Capital. At the time Polish media was stating it had to do with Bitfinex mainly, although as Crypto Capital seems to be or to have been more of a general processor, there were seemingly other funds allegedly related to drug cartels.

It is around this time when Tether begins to take off in a big way. To keep on running, Bitfinex basically tokenized the dollar so as to bypass the banking system entirely and presumably so as to prevent the seizure of their customer’s funds.

As a new invention, Tether faced many questions and an incredible amount of scrutiny, but at the end it was revealed by an unnamed government official himself that Tether is fully backed after all.

This latest announcement further shows that apparently the only thing they could find on Bitfinex was that it used some of the Tether funds to process customer withdrawals presumably while they waited for the release of this $850 million.

Tether has now become a global phenomena that serves individuals from South Africa to Brazil, Russia to China, and everywhere else in between.

It’s a crypto-dollar running on an open public blockchain with everyone able to see all of its movements.

In China in particular, this crypto-dollar is allowing them to bypass the banning of centralized crypto exchanges by getting USDT Over the Counter (OTC) to then trade it on crypto only or even decentralized exchanges as an ERC-20 version of Tether has been launched.

This bypassing of the banking system through a crypto stable-money is radical, yet as shady or otherwise as it may be, Bitfinex stood in the face of considerable assault.

There are now more legit versions of Tether, whether USDC, Dai, or any of the other ones that seem to come out every day. So what happens to Bitfinex now is not that important, but the Iron Exchange will probably always have a place in the history of the rise of cryptos for in fire it seems to have been forged.

Copyrights Trustnodes.com

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