Bitcoin has reacted sharply to news Bitfinex and Tether received subpoenas from US regulators last week.
Update: Nathaniel Popper, a reporter from New York Times, has claimed in a tweet that the subpoenas were delivered on Dec. 6 and not last week, according to ‘source familiar with the matter.’
Major cryptocurrency exchange Bitfinex and token issuer Tether have received subpoenas from US regulators as questions continue to arise about the latter’s ‘true’ value.
As Bloomberg reports Tuesday, Jan. 30 quoting sources who opted to remain anonymous, Tether’s notional USD peg has come under increasing suspicion, with authorities “routinely” querying its legal providence.
“We routinely receive legal process from law enforcement agents and regulators conducting investigations,” the publication quotes emailed statements from Bitfinex and Tether sent this week. “It is our policy not to comment on any such requests.”
Controversy has swelled around Tether, whose chief executive officer Jan Ludovicus van der Velde is also the CEO of Bitfinex, after volatility and rumors of Bitcoin price manipulation surfaced late last year.
While it remains unclear as to what specifically triggered the subpoenas, which both companies received last week, the move comes as less of a surprise amid the flurry of suspicion surrounding them on social media in January.
In reactions following the news, cryptocurrency industry commentators had mixed opinions.
WhalePanda, who has become known for his trading and business-related tweets, noted the lack of connection between Bitfinex, Tether and US authorities.
I'm a clueless idiot but what does the CTFC have to do with Bitfinex (not US company), Tether (not US company) and the fact that Bitfinex doesn't allow any US customers on their platform. Although it might be from before that they enforced that rule.
— WhalePanda (@WhalePanda) January 30, 2018
Meanwhile, Bitcoin prices have taken a plunge on Tuesday, likely caused in part by the news. Charlie Shrem considered those selling off Bitcoin to be “truly stupid,” as Tether holdings presented the risk and cryptocurrency presented a “way out” of any financial losses.
Panic sellers of #bitcoin are truly stupid. Think about it, if you are holding Tether, the only way out would be to *buy* crypto with it. https://t.co/15NBl7IeP7
— Charlie Shrem (@CharlieShrem) January 30, 2018
As of press time Tuesday, Tether was trading at an average of $0.998, just below parity, with prices having swung as high as $1.05 in the last month.
Bitcoin fell an average of 11% according to data from Coinmarketcap.
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