US authorities suspect Bitfinex of hiding $850 million loss

US prosecutors suspect cryptocoin exchange Bitfinex of hiding a loss of about $850 million by masking it with financial transactions with the cryptocoin Tether. The parent company denies the allegations.

The allegations were leveled by US prosecutors in New York, who have released a statement online. The parent company of the crypto exchange Bitfinex and the digital currency Tether is said to have tried to cover up the loss of about $850 million with a series of financial transactions. That would have happened after the amount was transferred to the Panamanian company Crypto Capital Corp.

Instead of announcing the losses, Bitfinex allegedly tried to fill the gap with reserves intended for the digital currency Tether. This is linked to the value of the dollar, something that Bitfinex guarantees by holding financial reserves. The US prosecutor has enforced in court that Bitfinex will stop replenishing the shortfalls with Tether funds.

Bitfinex has responded to the reports through a statement issued to Coindesk, among others. In it, the company denies the allegations and indicates that the funds transferred to Crypto Capital were not lost at all, but were confiscated. Bitfinex says it is trying to release the funds again. Bitfinex and Tether are not in financial trouble, according to the parent company.

It is not the first time that Bitfinex and Tether have run into trouble. Last year it was already announced that the American authorities were investigating, and crypto coins were stolen from both Bitfinex and Tether.