U.S. Commodity Futures Trading Commission is investigating Bitfinex and Tether according to an official who refuses to be named. This is after claims surfaces that all the Tether cryptocurrency assets were not backing up by dollar reserves.
The companies told Bloomberg on Tuesday that they could not give details of the requests they routinely receive from the regulator.
Bitfinex and Tether said in an emailed statement,
“We routinely receive legal process from law enforcement agents and regulators conducting investigations. It is our policy not to comment on any such requests”.
Tether cryptocurrency is using around the world and each of the USDT. Thus, their cryptocurrency, to be backed by a dollar of the reserve. Skepticism emerged about Tether following allegations that they were printing more money in Tether dollars than U.S. Federal Reserve. Some irregularities also surfacing that the newly published money was sent to Bitfinex. Tether has not done an audit of the asset since Sept. 15. Accounting firm Friedman LLP showed that Tether had $443 million and 1,590 euros ($1,970) in unnamed bank accounts as of then. Its tokens were value at $420 million that day.
The International Consortium of Investigative Journalists also leaked Paradise Papers documents showing that both entities are but sister companies with overlapping ownership. For instance, Phil Potter is a Tether director and even the chief strategy officer at Bitfinex.
Wells Fargo & Co also ended a role as a correspondent bank that facilitated U.S. customers to send money to bank accounts held by Bitfinex and Tether in Taiwan. The two crypto entities did not identify the involved banks.