#285
Isn't It Ironic
Published:
Apr 27, 2019
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The Attorney General of New York State dropped a bombshell this week by implicating Bitfinex’s Tether in a massive fraud. They believe Bitfinex was trying to mask the loss of $850m of customer funds that it had given to a third-party payment processor based out of Panama.
For some background, Tether is a stablecoin that was created by the cryptocurrency exchange Bitfinex as a digital representation of a dollar – the exchange was to hold physical dollars at a third party bank account to ensure that each Tether was fully backed.
For years, market participants have accused Tether of fraud since its parent company would not release audited financials. If we believe the Attorney General’s report, the most surprising revelation is that Bitfinex’s intentions were actually in the right place – and Tether was always a legitimate dollar. The crypto-exchange only started raiding the Tether funds AFTER their foreign payment processor went under.
As the DeFi (decentralized finance) movement continues to take hold, it is painfully obvious that large unregulated centralized exchanges are the crypto ecosystems weakest link.
Ultimately, the sheer irony of how the Tether situation has played out is not lost on anyone…. certainly not Ms. Morissette.
Portfolio News
FinTech Collective part of growing lineup at inaugural Digital Asset summit - FinTech Collective's Sean Lippel will be moderating an all-star DeFi (decentralized finance) panel on May 15, 2019 which includes Josh Stein (CEO, Harbor), Stephen McKeon (Partner, Collaborative Fund), and Juthica Chou (COO, LedgerX). Read more
Isn't It Ironic
Bitfinex used Tether reserves to mask missing $850m, probe finds - While Tether may not have started out as a fraud, the New York attorney general alleges the cryptocurrency exchange operator drained popular coin's reserves to conceal missing funds. Read more
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Select Financings
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Unqork - New York based A.I. platform to automate customer workflows for financial institutions has raised a $22m Series A led by Goldman Sachs. Read more
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