Bitfinex has faced a lot of scrutiny over the past few months. While it is the world’s leading Bitcoin exchange, there have been some interesting developments behind the scenes. Many people are concerned about the relationship this exchange has with Tether, a company issuing digital tokens backed by fiat currency reserves. To counter the claims leveled against it, the exchange has hired a major law firm.
Steptoe & Johnson LLP is Representing Bitfinex
In a way, it was inevitable that Bitfinex would have to respond to the many allegations the company is dealing with right now. The company has quickly risen through the ranks to become the world’s top Bitcoin exchange platform. It also supports a wide variety of altcoins, most of which can be exchanged against both Bitcoin and the US dollar. However, that is not what most people are worried about right now. It is the company’s close relationship with Tether which has been raising a lot of eyebrows.
More specifically, sources have claimed Tether has issued far more USDT tokens than it has assets to back up. Whether or not that is the case remains unknown at this stage. The company has yet to undergo an independent and legally binding audit of its reserves, and it remains unclear if and when that will happen. Until such an audit occurs, there will always be allegations which border on conspiracy theories.
Since a large chunk of those USDT tokens have ended up on Bitfinex, some people fear the exchange is essentially manipulating the Bitcoin price. Such allegations cannot go unchallenged, which is why the company has hired Steptoe & Johnson LLP to put an end to these claims and undertake legal action against those individuals attempting to discredit the company. False claims and related activities by various parties will be scrutinized, although the repercussions remain unknown at this point in time.
Steptoe & Johnson LLP is not a stranger to either cryptocurrency or blockchain technology. The company leads the Blockchain Alliance, a group of over 60 companies focused on combating illicit activity on the blockchain. Bitfinex is also a member of the Blockchain Alliance, and thus it makes sense for both companies to join forces in this time of need. The exchange has also worked hard to aid law enforcement and regulatory agencies in their efforts to fight criminal activity involving cryptocurrencies.
Bitfinex counsel member Stuart Hoegner commented as follows:
“To date, every claim made by these bad actors has been patently false and made simply to agitate the cryptocurrency ecosystem. As a result, Bitfinex has decided to assert all of its legal rights and remedies against these agitators and their associates.”
How this situation will play out remains to be seen. It is evident the meteoric Bitcoin price increase has sparked fear in the hearts of many, and anything that looks remotely suspicious will be shared with the public. Very few of those claims will actually be proven true, though. Whether or not there is any collusion between Bitfinex and Tether remains to be determined. For now, the evidence says “no”, but some of the claims made by these “bad actors” raise interesting questions.