On April 25th 2019, it appears that the The New York Attorney General’s office has released a court order against iFinex, the company behind Bitfinex exchange and issuer of Tether, alleging them to have covered up $850 Million Loss using Tether Funds.
Under the court order, iFinex directors, officers, principals, agents, employees, contractors, assignees or any other affiliated individuals are to cease accessing, loaning or making any other claim to the dollar reserves held by Tether.
You seen the flash?
Just hours after the news enters the crypto zeitgeist, the market was quick to react.
The price of Tether also dipped slightly during the same period. Suggesting high sell pressure, which quickly gets abated as the price goes back to peg.
While Bitfinex has issued a statement regarding the court orders. It remains to be seen what events will ensue in the following days and weeks. However, with 60.7% of all Bitcoin trades happening against Tether, such an allegation (regardless if true or false) levied from a State Attorney General will surely impact people's perception towards the exchange and the stablecoin.
Bitcoin has just recently climbed back up to $5000 from the pits of crypto-winter. This is about the worse time for such a scandal to rear its ugly head.