CFTC Subpoenas Bitfinex over its Murky Relationship with Tether

Bitfinex, the world’s biggest Bitcoin Bitcoin While some may still be wondering what is Bitcoin, who created Bitcoin, or how does Bitcoin work, one thing is certain: Bitcoin has changed the world.No one can remain indifferent to this revolutionary, decentralized, digital asset nor to its blockchain technology.In fact, we’ve gone a long way ever since a Florida resident Laszlo Hanyecz made BTC’s first official commercial transaction with a real company by trading 10,000 Bitcoins for 2 pizzas at his local Papa John’s.One could now argue that While some may still be wondering what is Bitcoin, who created Bitcoin, or how does Bitcoin work, one thing is certain: Bitcoin has changed the world.No one can remain indifferent to this revolutionary, decentralized, digital asset nor to its blockchain technology.In fact, we’ve gone a long way ever since a Florida resident Laszlo Hanyecz made BTC’s first official commercial transaction with a real company by trading 10,000 Bitcoins for 2 pizzas at his local Papa John’s.One could now argue that Read this Term Exchange Exchange An exchange is known as a marketplace that supports the trading of derivatives, commodities, securities, and other financial instruments.Generally, an exchange is accessible through a digital platform or sometimes at a tangible address where investors organize to perform trading. Among the chief responsibilities of an exchange would be to uphold honest and fair-trading practices. These are instrumental in making sure that the distribution of supported security rates on that exchange are effectiv An exchange is known as a marketplace that supports the trading of derivatives, commodities, securities, and other financial instruments.Generally, an exchange is accessible through a digital platform or sometimes at a tangible address where investors organize to perform trading. Among the chief responsibilities of an exchange would be to uphold honest and fair-trading practices. These are instrumental in making sure that the distribution of supported security rates on that exchange are effectiv Read this Term by trading ‎volume, was issued a subpoena by the US financial regulator ‎in regard to the digital token that its backers have long had a murky ‎relationship with, Tether. ‎

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The CFTC wants Bitfinex to provide more information about Tethers, ‎which are tokens backed by US dollar deposits, with each ‎token always worth one dollar, as the two entities share the ‎same CEO, Jan Ludovicus van der Velde, Bloomberg reported.‎

According to the report: “The U.S. Commodity Futures Trading ‎Commission sent subpoenas last week to virtual-currency venue ‎Bitfinex and Tether.”‎

Specifically, Bloomberg states that the subpoena is looking for documents ‎related to the company’s purported cash deposits, particularly ‎after the bitcoin price crashed in the last few weeks.‎

Tether’s records showed that it had $443 million in ‎bank accounts as of Sept. 15. However, the British Virgin Islands-based firm didn’t ‎identify the banks where that money was held, and a report from auditor Friedman LLP said that it didn’t investigate the reliability of ‎such records. The accounting firm only confirmed that bank deposits were held in the ‎name of a trustee, but Friedman said that it could not confirm that Tether ‎had any enforceable agreement with that trustee.‎

As such, the value of Tether only rests on the claim ‎by its issuer.

Adding to its banking woes, Tether lost access to Wells Fargo as its correspondent bank in April. It received deposits from US customers from this bank.

Earlier in November, more than $30 million worth of USDT was stolen from the company. Given its size, the theft sparked confusion and frustration among market traders and observers, and it has now attracted the attention of the US regulator.