Bitfinex and Tether have received subpoenas from US government

According to sources that are familiar with the matter, subpoenas were delivered on 6th January 2018. There is increased suspicion about USD Tethers (USDT) cryptocurrrency which is suspected not to be pegged on USD dollars. The current market capitalisation of USDT  Tether is over $2billion. However, there is suspicion that Tether does not have the $2 billion in their bank accounts.

The company has refused to have its accounts audited and it has terminated its contract with Friedman who was their auditors. It is suspected that the company’s books are suspicious and could reveal that tethers are not backed by equivalent number of dollars. Users believe that one tether is equal to 1usd.

However, lack of transparency and audit has generated a lot of suspicions that the company could be engaged in illegalities. The company has refused to disclose its banks since Well Fargo terminated its banking agreements in 2016. The company also does not accept deposits from United States residents which deepens suspicions about its practices.

Both Bitfinex and Tether have the same Chief executive officer who is Ludovicus van der Velde. Some people argue that this could be the reason why the price of bitcoin has tanked in the recent pasts since the rise could have been manipulated by fake tethers. However, others argue that the value of tethers in the cryptocurrency market is insignificant since the crypto currency market has a market capitalisation of over 500 billion hence cannot be affected by tethers even if all tethers were proved to be fake. The chief executive of Tether has however indicated that the company routinely updates regulators about their operations but he noted that the company had a non disclosure agreement which meant that they could not reveal the details of their banks to the public until the full audit is done.

Image result for Ludovicus van der Velde

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Staff Writer at Cryptobiz Global
I am a crypto enthusiast. A bitcoin trader and consultant in the frontier markets. I also Write and Rewrite. When not writing or rewriting, I read and do some gardening. Author of So You Want to Get Into Courtship?. Practical and Mystical.

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