• The Wall Street Journal uncovered emails from 2018 that revealed illicit acts by Bitfinex and Tether, two of the largest cryptocurrency companies.
• New York State Attorney General investigated the firms for giving out loans to investors and offering unregistered securities.
• The firms attempted to deceive banks by using fake documents and shell companies, leading to asset seizures and connections to terrorist groups.
Bitfinex & Tether’s Illicit Acts Uncovered
The Wall Street Journal has uncovered emails from 2018 revealing alleged illicit acts by Bitfinex and Tether, two of the largest cryptocurrency companies in the world. These emails have shed light on past legal issues surrounding the firms, including when they were banned from operating in New York state due to accusations of giving out loans to investors without registering as a security.
Attempts To Deceive Banks With Fake Documents
In order to gain banking support, Bitfinex and Tether allegedly tried to mask their identities with other individuals or fake companies in an attempt to deceive banks. Emails accessed by the WSJ showed how Stephen Moore, one of the owners of Tether Holdings Ltd., cautioned a USDT trader in China against using fake contracts and sales invoices in an effort to open accounts. This resulted in more legal issues for both firms as it placed them at risk with regulators.
Asset Seizures & Connections To Terrorist Groups
As a result of these attempts at deception, millions of dollars worth of assets have been seized by authorities while also uncovering connections between the firms and terrorist groups. This has caused further reputational damage for both Bitfinex and Tether as they are now being seen as untrustworthy entities in the crypto space.
Stablecoin Pegged To USD Must Have Equivalent Amount In Reserve
Tether Holding LTD is behind USDT, a stablecoin worth over $70 billion that is pegged 1:1 against the US dollar meaning that each coin must have an equivalent amount of USD backing it up in reserve. When it was discovered that this was not always true, this led to further investigations into both Bitfinex and Tether resulting in further legal action being taken against them.
Conclusion
The recent revelations about Bitfinex & Tether’s alleged illicit activities shows just how risky it can be dealing with large cryptocurrency businesses without proper research into their background beforehand. Although these businesses offer attractive services such as lending opportunities or stablecoins backed 1:1 against fiat currencies like USD, there is always a chance that something could go wrong which would put your funds at risk if you’re not careful when investing with them