Bitfinex's secret operation was exposed, and BTC plummeted in response, triggering panic

The past two hours have been long and grueling for the cryptocurrency markets.

Tether is in trouble, may BTC face a "dead end"?

According to a press release published Thursday, the New York Attorney General’s Office claims that crypto exchange Bitfinex lost $850 million and subsequently secretly filled the gap with Tether’s nearly $1 billion in cash reserves. New York Attorney General Letitia James announced that she has obtained a court order against iFinex Inc., which operates both Bitfinex and Tether, ordering it to stop violating New York law and defrauding New York residents. It is reported that iFinex Inc.

After the news broke, Bitcoin plummeted. In just 30 minutes, the price of BTC on the Coinbase exchange fell from $5,550 to a recent low of $4,950, a drop of 10%. Altcoins followed the "coin king" and plummeted, with USDT on some exchanges falling to $0.98.

In addition, the price of Bitcoin on Bitfinex exchange has been discounted compared to the price on Binance for the first time since the beginning of this year. On December 29 last year, the premium of Bitcoin price on Bitfinex exchange over Binance reached $198, a record high. Since the beginning of this year, this premium has continued to narrow. After a sharp drop this morning, the price of Bitcoin on Bitfinex has been discounted compared to Binance for the first time since November 30 last year. The price of Bitcoin on Bitfinex fell to 5048 USDT this morning. Currently, the prices of the two major exchanges are basically the same.

However, there are also market views that the collective decline of mainstream currencies may not mean that the currency market is facing a collapse.

Cryptocurrency researcher Hasu pointed out that Bitfinex's use of Tether's reserves actually proves that USDT has financial support.

In addition, CNBC host Ran NeuNer tweeted that the Bitfinex incident can "further confirm that we are in a bull market. First, the market reacted to the news; second, the market rebounded quickly."

Bitfinex responded quickly, but the panic spread

An hour after the Wall Street Journal and other major media broke the news that Bitfinex had misappropriated funds, a Bitfinex employee who called himself "Garbis" spoke out on the official Reddit forum, saying that the Bitfinex team "is reviewing relevant information and documents" and will issue a statement on the matter as soon as possible.

Despite this response, which was deemed meaningless by the majority of the market, Bitfinex users revealed that they were withdrawing all funds from the exchange.

Venezuelan Bitcoin enthusiast Eduardo revealed that although he did not sell BTC, he was withdrawing his funds from the Bitfinex platform. It is reported that many people in the crypto community have also made similar remarks and posted screenshots of their withdrawal requests to express their doubts and dissatisfaction with Bitfinex's practices. However, it is not clear whether these withdrawal requests will be processed.

In addition, Whale Alert transfer monitoring data showed that a large amount of funds of approximately 4,000 BTC was to be transferred from Bitfinex to an unknown exchange.

USDT continues to increase

Yesterday, Xiaocong’s article mentioned that on April 25, Tether issued a large number of USDT on the Omni protocol based on the Bitcoin network, Ethereum and TRON platforms, with the newly issued amounts reaching 300 million USDT, 70 million ERC20 USDT and 49.9 million TRC20 USDT, respectively, totaling approximately 420 million USDT.

But the Bitfinex incident obviously cannot stop Tether from issuing more shares.

According to data from the PeckShield situational awareness platform, at 00:32 this morning, Tether issued a new USDT worth $100 million on the Ethereum network, with a block height of 7637646. So far this month, Tether has issued ERC20 USDT on the Ethereum network for the fifth time, with a total issuance of 400,010,000 pieces.

After a series of large-scale issuances this month, the market value of USDT has rapidly risen to over US$2.8 billion, breaking through its historical high at one point.

Author: Gu Mengting

Source: Scallion Blockchain

Please indicate the source when reprinting