ALTCOIN, BITCOIN, BLOCKCHAIN

U.S. Regulators Subpoena ‘Dollar-Backed’ Cryptocurrency Tether

The U.S. Commodity Futures Trading Commission sent subpoenas to both Bitfinex and Tether on Dec. 6, according to a source who asked not to be identified discussing confidential information.

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Tether’s “dollar-backed cryptocurrency”, USDT, has developed into a widespread alternative for US dollars on cryptocurrency exchanges worldwide, with an approximate market capitalization of $2.23 billion at press time, according to CoinMarketCap.

The company has reassured investors the coins are backed by physical U.S. dollars held in a reserve, but many in the crypto community have grown skeptical on whether the funds are really backing USDT.

One Twitter user, who goes by the handle Bitfinex’d, claims Tether has been creating tokens “out of thin air,” thus causing the price of bitcoin to rise on the Bitfinex exchange.

“We routinely receive legal process from law enforcement agents and regulators conducting investigations,” Tether said Tuesday in an emailed statement.

On January 29, Blockchain Daily reported Tether has ended their relationship with auditing firm Friedman LLP.

“Given the excruciatingly detailed procedures Friedman was undertaking for the relatively simple balance sheet of Tether, it became clear that an audit would be unattainable in a reasonable timeframe,” Tether said.

In September, Friedman released a report stating Tether had $442.9 million of cash on reserve.

Friedman has not responded to our request to comment on the matter.

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