The past week has been very bad for Tether, Bitfinex, and the cryptocurrency markets at large. Though prices have largely recovered from losses incurred at the news that the New York Attorney General (AG) had sued Tether and Bitfinex over misappropriation of funds, we’re still no closer to learning what is to become of Tether. For better or worse, USDT is a major placeholder in 2019 crypto trading. Will it crash? What would happen to the price of Bitcoin if it did?
These myriad unknowns speak to organizations that are opaque, at best. Analysts have long suspected that Tether didn’t have the 1:1 Dollar reserves that it claimed. Reasonable suspicions also suggest that unbacked Tether were, on many occasions, “printed” out of thin air, then used to drive up the price of Bitcoin during the 2017 bull market.
As Tether’s issuer, Bitfinex is at the center of this investigation’s crosshairs, now thankfully in the hands of New York State authorities. This suit alleges that Bitfinex, through shady dealings known and unknown,…