Bitfinex Reinstates USD Deposits and Withdrawals, Still Causes Doubts
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Cycling and other professional sports have doping, and now concerns are mounting that the cryptocurrency industry may have used a kind of performance-enhancing drug of its own, in the form of a digital token called tether. The Commodity Futures Trading Commission sent bitfinex reddit us last month to Tether, the company that issues the token, and to Bitfinex, one of the world's largest digital-asset exchanges and a company with close ties to Tether.
If the subpoenas should lead to an enforcement action, it may scare off banks, big technology firms and other institutions that have been warming up to cryptocurrency. News of the subpoenas, which were delivered on Dec. Tether tokens are supposed to function bitfinex reddit us digital dollar receipts, with the value pegged to the U. That way, exchanges like Bitfinex have a token of stable value that can be used to facilitate cryptocurrency trades. Where a problem would arise is if the dollar reserves were a fiction and Tether has simply been printing digital money to drive up asset prices.
The collapse of a house of cards that big could tank cryptocurrency prices and usher in a prolonged bear market. Concern over the systemic risk Tether might pose has been growing in some quarters. Tether recently broke things off with accounting firm Friedman, which was to perform an audit of the company.
Skeptics have bitfinex reddit us askance at Tether's continued issuing of new tokens in the absence of a verifiable audit. Others are encouraged by it, taking Tether's continued operations while under CFTC scrutiny as a sign the company must be solvent. It may also bitfinex reddit us that authorities don't want to rush to judgment — bitfinex reddit us experts say regulators will never again be as hands-off as they were in and Online, in the communities where cryptocurrency traders gather bitfinex reddit us share news and gossip, reaction to news of the subpoenas was mixed.
They compared it to fractional-reserve banking — a system many bitcoin users would like to escape. Others argued that Bitfinex fees relative to trading volume were likely sufficient in and of themselves to cover the outstanding token balances.
However, in keeping with the general air of secrecy surrounding Tether — the identity of its CEO, a man named Jan Ludovicus van der Velde, only became publicly known last month — the names bitfinex reddit us the bank's holding company funds were blacked out in the document. Still other digital-currency enthusiasts dismissed the regulatory action as old news, after an initial Bloomberg story was updated to reflect the fact that the subpoenas had been delivered weeks ago.
Whatever fear, uncertainty and doubt the news might justifiably inspire, they said, insiders had already priced it into the market, which had fallen from a Jan. Many long-time cryptocurrency investors declared that if digital-asset prices did plummet, they would keep buying all the way down. Investment banks and other traditional institutions could be forgiven for feeling whiplash as they follow the headlines and try to figure out bitfinex reddit us stance to take toward bitcoin and other digital assets.
Regardless of the day's bitfinex reddit us, Bromberg argues that the industry's fundamentals remain "incredibly strong. Massive crypto hack highlights need for custody solutions Crypto crackdown? That's a lot of hype, too Blockchain tokens may be the future of finance — if regulators bitfinex reddit us it Bitcoin pioneer challenges cryptocurrency status quo. Partner Insights Sponsor Bitfinex reddit us From: Bitcoin and the Fight for the Future of Finance.
Cryptocurrencies 'could have a role' in investor portfolios. Comment Start the Conversation, Login. Like what you see? Make sure you're getting it all Independent and authoritative analysis and perspective for the banking industry.
