One of the biggest crypto exchange, Bitfinex, and Tether, a centrally issued digital currency with a market cap above $2 billion, are now being scrutinized by US regulators.
The Commodity Futures Trading Commission (CFTC) has sent subpoenas to Bitfinex and Tether on December the 6th, according to a person familiar with the matter, who asked not to be identified discussing private information, Bloomberg reports.
“We routinely receive legal process from law enforcement agents and regulators conducting investigations,” Bitfinex and Tether said Tuesday in an emailed statement. “It is our policy not to comment on any such requests,” Bloomberg says while adding CFTC would not comment.
CFTC fined Bitfinex $75,000 in June 2016 for offering unregulated margin trading. Shortly thereafter, a banking blockade was implemented, making it difficult for the exchange to operate under normal conditions.
Things took an even worse turn when they were hacked out of 120,000 bitcoins, but the exchange still managed to continue operations.
Tether, which shares many of its executives with Bitfinex, then suddenly begun an ever increasing amount of USDT printing, which are meant to be backed by an equal amount of USD.
The speed of increase under a banking blockade raised eyebrows, and many questions, with both Bitfinex and Tether recently announcing they no longer accept new accounts registrations.
Adding a twist, the warrant canary of a respected coder and a Bitfinex employee, Chris Ellis, suddenly disappeared on or around December 15th 2017.
A long promised audit to show Tethers (USDT) are backed by actual dollars, and that Bitfinex is solvent, was then dropped recently, with the company that was meant to undertake the audit, Friedman LLP, making no comment on the matter.
It is unclear now following this recent news whether the audit was dropped due to the subpoena or whether the subpoenas were sent because the audit was dropped.
But what does seem clear is that US regulators are keeping a close eye on the matter, so seemingly taking the first step towards an investigation.