According to a lawsuit filed by the New York Attorney General, cryptocurrency exchange Bitfinex used over $700 million from the reserves backing Tether (USDT) to cover up $850 million in missing funds.
This highly fraudulent act caused cryptocurrency markets to crash over 5%, eliminating over $10 billion in value, affording to CoinMarketCap.com on Thursday, April 25th.
The missing $850 million was said to have gone missing through a deal between Hong Kong-based iFinex (which holds Bitfinex) and Panama-based Crypto Capital. iFinex reportedly chose Crypto Capital to process payments for customer payouts after a series of traditional banks refused to do business with them.
When it became clear that the $850 million was lost, iFinex fraudulently stole “at least” $700 million from the reserves that (supposedly) backed Tether, their own stable coin pegged against the U.S. dollar.
