Bitfinex Sends 630 Million Tether (USDT) To Cold Storage

Leading digital asset exchange, Bitfinex, has reportedly been sending huge amounts of Tether (USDT) tokens to cold storage vaults. This has raised even more concerns among crypto market participants regarding its operations – which regulators have been closely monitoring for nearly a year now.

Because Tether Ltd. and Bitfinex are managed and owned by some of the same entities, the US Commodities Futures Trading Commission (CFTC) had subpoenaed both firms on December 6th, 2017.

Analysts are now beginning to question whether both Bitfinex’s and Tether’s incentives are aligned to keep the stablecoin operating at a price below its $1 peg. If there is a 1:1 reserve there is an opportunity cost to not buying back USDT and redeeming them for $1. This could explain the large amount of USDT that was removed from circulation.

The cryptocurrency exchange Bitfinex has a lot to do with Tether, and the financial issues of both have attracted investors’ attention. Earlier it was reported that Bitfinex had switched to the Bank of Communications (Hong Kong) account and used Citibank as a transit bank to account for the US dollar; as early as June 6th, there were also reports that it abandoned the Puerto Rico Noble bank account and used the HSBC bank. Private accounts have also been cancelled.