Following the revelation that Bitfinex and Tether were being investigated by the New York Attorney General’s office for allegedly covering up $850 million in losses, the trading of Bitcoin (BTC) on the exchange is at a $300 premium, Bloomberg reports.
Both Tether and Bitfinex are under great scrutiny, following an extended period where investors suspected that Tether lacked the fiat reserves to back up its circulating supply. In the filing that the New York AG submitted, a Bitfinex insider described how a lack of funds could send Bitcoin to below $1000.
In the New York state court, Tether revealed that it had the short term securities and funds to back 74% of the supply. The incident has caused some users to drop their Tether holdings amid fear that both entities might not last much longer.
Bloomberg intelligence analyst, Mike McGlone, mentioned that Bitcoin is the go-to digital currency,
What the actual price is and what’s being used to translate to Bitcoin is part of the issue. People on Bitfinex are getting out of Tether, off the exchange and what’s the first thing you’re going to buy if you don’t want too much broad crypto exposure? Bitcoin.
