Altcoin News: US Prosecution Lawsuit against Bitfinex and Tether Led to a Market Decrease

April 26, 2019, by Marko Vidrih on ALTCOIN MAGAZINE

On the morning of April 26, the Bitcoin exchange rate lost about 6% and dropped by $400. So the market reacted to the lawsuit of the Prosecutor General of the State of New York against the company iFinex, behind Bitfinex and Tether.

The Attorney’s Office released a 23-page long document that says that Bitfinex had illegally provided trading services to several traders from New York and the United States. Note that last year, representatives of the exchange said they would not serve US residents.

In addition, the investigation revealed that Bitfinex and Tether are involved in hidden and illegal transactions to cover the losses of the Bitfinex exchange by extracting Tether reserve funds.

“Our investigation revealed that the operator of the Bitfinex trading platform, which also controls the virtual currency Tether, is associated with concealing a loss of $850 million of client and corporate funds,” said New York State Attorney General Letitia James.

Bitfinex reportedly lost $850 million after it sent them to the Panamanian payment operator Crypto Capital Corp. As a result, the funds were either lost by this company or simply stolen. But the operator iFinex had to cover losses, using reserves of stable coin Tether.

“Our team is reviewing the documentation and we will be back to you with a statement in the following hours. Thank you”, — wrote the representatives Bitfinex exchange on Reddit site.

However, this did not prevent a large number of traders from starting to withdraw funds from the exchange and close accounts at the exchange. Some analysts believe that traders may start to get rid of Tether and this will help the market recover because people will buy cryptocurrency.

Against the background of these events, the Bitcoin rate fell by $400. This is not the biggest fall in the price of the first cryptocurrency in history, but such news may prevent the recovery of the cryptocurrency market, signs of which are seen by many analysts.

For example, Fundstrat founder Tom Lee recently announced that the market is preparing for the start of a new growth cycle. Note that the other day Bitcoin rate rose above $5,500 for the first time since November 2018.

Author: Marko Vidrih

Chart via TradingView