Topic: [2019-04-26] CNBC: Bitcoin price falls on NY AG Bitfinex probe (Read 553 times)

New update.

Bitfinex posted this in their blog. This is a victory according to them, however, there are other news articles that say that the injunction is still blocking Bitfnex's line of credit from Tether. But as also reported in other news articles Bitfinex has collected $1b in funding in their IEO. This will not be a problem hehehe.



Today, the Hon. Joel M. Cohen of the New York Supreme Court (Commercial Division) granted our motion to modify the injunction obtained by the New York Attorney General against our business because the original injunction was vague, overbroad, and not time-limited. The court’s order allows Bitfinex and Tether to continue their normal business activities. It also stipulates that the injunction will expire in 90 days and that the burden to seek any renewal from the court rests squarely on the shoulders of the New York Attorney General’s office, where it belongs. Judge Cohen held that New York’s Martin Act “does not provide a roving mandate to regulate commercial activity.”

This order is a victory in the ongoing defence of our business against the New York Attorney General’s office.

The New York Attorney General’s office has sought to proceed ex parte against us and in bad faith, notwithstanding our previous, historical, and voluntary co-operation with them. We will vigorously defend against any action by the New York Attorney General’s office, and we remain committed, as ever, to protecting our customers, our business, and our community against their meritless claims.

Source https://www.bitfinex.com/posts/363

@figmentofmyass. I speculate that it might be a combination of all 3 that has come into an agreement that it would be better for the cryptospace, and them, to support Bitfinex and profit than leaving it to die. Which I agree with.

@LeGaulois. Agreed! I reckon something only positive will come out of this if Bitfinex is saved.

people who are already exposed to tether risk worth many millions of dollars. they know they will suffer from any crisis of confidence in tether or bitfinex. they also know the token sale news provided relief to the market.

if i had millions in USDT, i would have given bitfinex a soft pledge worth all my USDT too. but i wouldn't follow through on it. bitfinex is now trading persistently below the rest of the market, probably due to lack of fiat inputs (vs legit exchanges like coinbase or bitstamp). so i'd be slowly sending my USDT to bitfinex right now and buying my way out.

anyway, i think there's a few different things going on:

1. there's a contingent of USDT holders who will pledge to buy into the token sale but will later renege. they are using the token sale as cover while they silently exit USDT while it's still trading near parity.

2. there's another contingent who is deeply exposed to tether risk (holding 8 figures + of USDT) who can't exit to other currencies due to lack of liquidity and are therefore now "holding the bag". they can help ensure USDT keeps trading at 1:1 by bailing out tether and reducing their exposure over time.

3. there's yet another contingent who may be speculating that the LEO token will pump a lot since it's modeled after BNB. by buying at 1:1 to USDT, they expect to profit.

So from the $1bln raised it's only come from large investors since the minimum was $1mln.
I have no idea why an investor would invest in an IEO knowing all the drama around Tether/Bitfinex.

1) Either they don't know the situation (they invested in something & somewhere but they're not aware how funds are used i.e. a funds pension, funds management or VC, idk)
2) or they do know perfectly the situation but in this case yeah I believe they're aware of something. No matter what is it, it could be something positive otherwise these investors would not have invest in.

Even Millionaire, I don't have testicles big enough to spend a couple of millions on Bitfinex, I prefer to buy scratch tickets

No thanks....LMAO

@figmentofmyass. This goes back to my argument about money launderers who might be using the cryptospace to run a global money laundering ring. Who would support Tether again for the stablecoin to continue going?

I reckon the other stablecoins might be harder to use for their purposes because they are more closely monitored. Tether appears to be immune of regulators and it has no clear auditing process.

i thought people who bought ifinex equity after the 2016 hack were crazy too. it turned out to be quite profitable. it's not my cup of tea, but some people like to live life on the edge i guess---high risk, high reward.

i think they're raising money mostly from USDT holders who i suppose have some incentive to fix the insolvency. it's a bit of a "shotgun wedding" type situation.

News update on this issue.

I shake my head. Bitfnex raised $1b from private investors depsite the United States government is after the exchange and a payment processor has $850m of their money. Who would be willing to take that risk? Do the investors know something?

Also, there is a chance that the case versus Bitfinex might be settled. What a win hehehe!



In the midst of legal uncertainty, Bitfinex has supposedly raised a billion dollars for their IEO token, LEO. The exchange has made no official announcement, but CTO Paolo Ardoino’s tweet has been interacting with Twitter users to explain the situation since his announcement.

In an alleged private placement, the company raised money from giants in and out of the crypto industry; the minimum issue was for a million dollars and some investors made a contribution over $100 million dollars. If true, this is possibly the fastest billion-dollar capital raise in any market. The timing of this placement has been immaculate considering their internal liquidity crisis.

The exchange has not made a statement regarding the arrest of Reginald Fowler from Crypto Capital, but they have announced support for Crypto Capital claiming that the authorities wrongly seized their funds. However, Bitfinex has shown immense public resilience no matter what the internal situation may be.

With judge Joel M. Cohen asking Bitfinex and the NYAG to hold discussions and come to a reasonable agreement, there is a possibility that the legal proceedings against Bitfinex will disappear. This will be an incredible victory for Bitfinex but nothing is certain until both parties have met.

Source https://btcmanager.com/bitfinex-cto-exchange-raised-1-billion-private-placement/?q=/bitfinex-cto-exchange-raised-1-billion-private-placement/&

@1Referee. I assume that for you it appears that USDT is not entirely backed by real US dollars which it was before this new issue? I reckon the old issue was already explained by Kraken last year.

https://blog.kraken.com/post/1664/on-tether-journalists-defy-logic-raising-red-flags/

Slippage due to very thin orderbooks. If you also take into consideration that most orders in the books that we see are spoof orders, which bots pull back when the price comes to their trigger price, you need even less fiat or tether to pump the price with.

In the same way, if people start selling like what happened late last year, you need the billions of circulating Tethers to provide buy support on exchanges like Bitfinex, Binance, OKEx, Huobi, etc. If there was no Tether but only actual fiat in the market, we without a doubt would have seen the price tank DEEP under the $3000 level, and perhaps even under the $2000 level.

People don't want to hear or admit it, but Tether is literally propping up the market.

yep, $3 billion being added to or subtracted from the total market cap is negligible. it's more about the fact that the crypto spot markets are so thin. pumping a billion tether dollars into these thin order books could raise the total market cap by hundreds of billions.

Because USDT is doubly powerful. Every time it's created it's newly injected money and it's 'actual' money, not market cap which means nothing anyway.

True, but when we are talking about the total crypto market cap, $175 billion currently, we are talking about the sum of market caps of all the coins listed on CMC, right? We don't take all those 10,000 other coins into account.



Exactly. And that's why I think that currently we can say that market caps of coins listed on CMC are more or less correspond to reality.

And, I'm sorry, but I still don't understand, how disappearance of $3 billion worth of tokens(USDT) can affect the market($175 billion) significantly?

The principle would be cool but it's utterly, utterly doomed. It would be as hopeless as Goldman Sachs attempting to sue Bitcoin. It's not their territory, they have no control and they'd certainly have no hope.

Every time more detail emerges about all this some service linked to BFX turns out to be breaking a law or getting arrested. It's pitiful.

So far it's mainly third parties doing this to them. They should've been a little brighter about who they do business with, or not done business at all.

@gentlemand. I agree, however, between Bitfinex and the big banks JPMorgan and Goldman Sachs which might be the hidden executors behind this case, I choose Bitfinex to win. It would send a message that the cryptospace will not be impaired by them with all their political power and connections.

I would have a lot more sympathy for Bitfinex if they hadn't repeatedly lied and obfuscated wherever possible. There is nothing virtuous about them. They've been consistent assholes. Maybe that was necessary to keep going. If it were and I were running it I'd put an asshole disclaimer on the site.



Since Bitfinex and Tether are the same bunch they could've funded every licence in the solar system. Bitfinex have had money pouring out of their arse at various points. It would be interesting to see if they actually could make Tether fully legit. They probably concluded it either wasn't possible or suited their purposes not to be.

Agreed, only another business decision to kill the competition by the ruling class and the politically connected with the help of a corrupt government hehehe.

I stand for Bitfinex to win this case. It will be good for the freedom of the cryptospace and Bitfinex is the lesser evil compared to JPMorgan or Goldman Sachs. I hope some people know this and do not listen to too much mainstream media.

i suppose giving up fiat wasn't really an option for tether. if a fiat-backed stablecoin had no fiat liquidity, that would eliminate their whole reason for existence. as for going legit, i don't think they had the capital to get properly licensed. so their legal counsel always kept them on the very edge of legality. (and i've no doubt they've engaged in fraud to keep bank transfers flowing)

in that sense, i agree with those who say tether = the downfall of bitfinex. bitfinex looked like they were going full shitcoin in 2017. they were listing endless altcoin markets and for months they couldn't process fiat withdrawals to retail customers at all, so fiat holders were exiting via crypto. but tether was being printed endlessly---seemingly corporate bank wires were flowing but not retail.

now we got $850m frozen already with fiat flow from bitfinex already at snail's pace. and now there's 3 billion tethers floating out there! i think we are all getting the feeling that banks/governments are clamping down on crypto exchanges and ramping up AML compliance efforts. this just seems bad all around considering how much exposure there is to tether. it feels like there's a black cloud over the market, waiting to open up on us......

It's because of Coinmarketcap gets rid of them. You refer to +2100 alts, but there are over 10,000 in reality. 2100 is only what Coinmarketcap allows you to see.

I'm not exactly sure what the name of the coin was, but one coin ended up seeing its market cap surpass $2000 billion, but with a volume of $30,000 in the last 24 hours. Coinmarketcap delisted it from their platform because of how obvious the manipulation was. Right now if you haven't got x amount of volume to justify a certain market cap, they will delist you.

Projects have gotten more cautious because being delisted from Coinmarketcap very likely means the end of your project.

Then they should either have knuckled down and gone as legit as possible, or given up dealing with fiat altogether.

Continuing down this shonky path was always going to wind up raping them and everyone touched by them, which is everyone in crypto, and it's happened yet again. Either they're deluded, autistic or plain thick.

A five year old reading how Crypto Capital operate wouldn't deposit their pocket money with them. That type of amateurishness and gormless dishonesty doesn't cut it any more.