Deng Jianpeng, Chinese blockchain expert and professor at Central University of Finance and Economics, has cautioned cryptocurrency enthusiasts to reduce their shares of Tether (USDT) after Bitfinex was alleged of covering huge losses using Tether and thereafter charged to court by the New York City Attorney General.
The cryptocurrency and legal research expert, maintained that Attorney General’s allegations are not off point and doubted if Bitfinex’s huge losses, termed frozen funds by the exchange, could be unfrozen.
Deng maintained that the Bitfinex’s losses frozen funds are real, adding that the possibility of unfreezing the fund is doubtful.
The crypto expert, after asserting that Tether may not be able to tender evidences of real bank reserves in US dollars equivalent to its issued USDT, cautioned exchanges and crypto investors to stop reducing their proportion of USDT, but expand their shares of Tether holdings to other stablecoins to reduce the possibility of losing at the end.
Deng praised the move by the NYC Attorney General, saying the idea is to regulate the crypto industry and lay foundation for future prosperity of crypto assets in the nearest future.
Bitfinex Legal Battle: What You Need to Know
Few days back, the New York Office of the Attorney General (AG) filled legal charges against Bitfinex and Tether (USDT) after alleging the company of performing illegal cover up amounting to $850 million.
According to the petition, the NYC Attorney General alleges Bitfinex of using Tether to cover up $850 million in losses that resulted from possible mismanagement or theft by the crypto payment company.
Bitfinex condemned the move by the New York Attorney on its blog, saying the company is law abiding and a strong supporter of law enforcement. The exchange condemned the lawsuit saying it is “gross overreach.”
Here’s the statement:
“The New York Attorney General’s court filings were written in bad faith and are riddled with false assertions, including as to a purported $850 million ‘loss’ at Crypto Capital. On the contrary, we have been informed that these Crypto Capital amounts are not lost but have been, in fact, seized and safeguarded. We are and have been actively working to exercise our rights and remedies and get those funds released. Sadly, the New York Attorney General’s office seems to be intent on undermining those efforts to the detriment of our customers.”