Bitfinex and Tether have been getting hammered in the press in reaction to a court order from New York Attorney General Letitia James related to an investigation of possible fraudulent activities. But interestingly, one would not know much of anything was happening from looking at the price data.





As a quick recap, James’s office obtained a court order regarding iFinex Inc. (the company behind both Bitfinex and Tether) on April 24th. In the announcement, James was quoted as saying an investigation had determined Bitfinex engaged in a cover-up to hide the lost of $850 million dollars.





This alleged loss of funds, which has been disputed by Bitfinex, came after the cryptocurrency exchange handed over customer funds to another entity called Crypto Capital Corp.





For reasons that remain unclear at this point, Bitfinex was unable to access the funds that were being held on their behalf by Crypto Capital, so a loan was made to Bitfinex from Tether. The loan was collateralized with Bitfinex shares.





On Crypto Twitter, there have been non-stop discussions about whether Bitfinex and Tether have acted appropriately, but let’s try to gain some clarity by looking at the actual data related to the Bitfinex exchange and TetherUS market.





Tether Price is Near $1





Despite all of the noise in the media, the USDT price is currently close to $1.00, which is its target valuation. According to OpenMarketCap, there was a sharp decline in the price of USDT from $1.00 to just under $0.97 in the aftermath of the initial reports regarding the action taken by the New York Attorney General’s office. Since then, the price has recovered a bit, nearly returning to the $1.00 peg on May 1st before falling again to around $0.99 at the time of this writing.





Interestingly enough, USDT is currently only $0.006 off from the USDC stablecoin (according to Messari Crypto), which was created via a joint partnership between Coinbase and Circle.









The more interesting activity in the stablecoin market over the past week may be the increased network values of USDT’s competitors. For example, the aforementioned USDC saw its total network value increase from $252 million before the Tether news dropped to $298.5 million just three days later, according to Coin Metrics.





Binance and Bitfinex are Still Top Exchanges





Binance and Bitfinex, which both see heavy USDT trading on their platforms, are still two of the top three exchanges ranked by trading volume, according to OpenMarketCap. Binance itself accounts for more than half of the entire crypto asset market’s trading volume, with many of its top trading pairs involving USDT.





In fact, other stablecoins aren’t visually relevant when compared to USDT’s exchange traded volume on a chart.





Having said that, there’s currently a premium on the Bitfinex bitcoin price. While bitcoin is trading at roughly $5,395 on Coinbase Pro and Bitstamp, the digital asset is trading for around $5,743 on Bitfinex. This is a premium of more than 6%.





Bitfinex’s price outlier could be due to uncertainty around the solvency of the exchange based on inferences from recent media reports. Traders are simply being cautious with where they keep their money.





Bitcoin does not contain any counterparty risk as a digital bearer asset, so those who are concerned about getting their money off of Bitfinex can buy bitcoin with U.S. dollars and withdraw it from the exchange. This has the side effect of increasing the price of bitcoin on the exchange.





A similar bitcoin exchange rate phenomenon occurred with the now-defunct Mt. Gox when it was experiencing solvency issues in 2013.





According to BitInfoCharts, roughly $1 billion worth of bitcoin has been withdrawn from Bitfinex’s cold storage wallet since news first broke regarding the New York Attorney General’s actions.







Additionally, data from Bitcoinity shows Bitfinex’s share of all bitcoin exchange trading volume has taken a dip since April 24th, though it’s unclear if this was simply due to variance.



