Anonymous Tether critic “Bitfinex’ed” lawyers up for legal battle
Bitfinex and Tether are legally pushing against one of their most prominent critics, who's preparing to push back.
Bitfinex'ed (probably not their real name) might be the most prominent Tether/Bitfinex critic around. The anonymous blogger has been on an analytic crusade against Tether and Bitfinex, presenting evidence that Tether might be artificially propping up the value of bitcoin and cryptocurrencies in general.
Tether: Quick recap
Tether is a cryptocurrency pegged to the US dollar. It's backed by the Tether company which says that it backs up all Tethers in circulation with money in the bank. However it hasn't been independently audited, and statistical evidence suggests that the newly printed Tethers are being used to artificially shore up bitcoin prices, primarily at the Bitfinex exchange, which is closely affiliated with the Tether company.
There's evidence on both sides of the fence.
- This statistical analysis suggests that Tether does not have full cash reserves.
- This statistical analysis suggests that Tether does have full cash reserves.
Either way, Bitfinex is now reportedly trying to legally stomp on Bitfinex'ed.
The legal battle began in December when Bitfinex announced that it would be taking legal action against its critics, including Bitfinex'ed.
Now Bitfinex'ed has retained Washington-based lawyer Steven Palley to help fight back.
"As you know, threats have been made and continue to be made against @bitfinex'ed. If we learn that your client is directly or indirectly responsible for these threats, or if any harm should take place to @bitfinex'ed as a result of these threats, there will be legal consequences."
Steven Palley, Bitfinex'ed's lawyer, confirmed to Cointelegraph that the above quote is an accurate excerpt from a letter he sent to Bitfinex's lawyers. The disagreement is being kept under close wraps, but there's clearly some legal progress being made between Bitfinex and its detractors. It's too early to say which way this will go, but it will almost certainly be interesting to watch. It might also play a role in the still unresolved Tether debate.
The most comprehensive and up-to-date take on the issue might be the one published by BitMEX in February. It states that Tether could feasibly have adequate currency reserves and there might be valid reasons it hasn't been audited, but that KYC/AML issues mean it's not out of the woods yet and speculators may want to be wary.
It's also dry and full of numbers, and there's no shortage of damp, emotionally charged material to pursue instead.
For sensationalistic hot takes, you can find articles describing Bitfinex'ed as "a liar, fraud and opportunist" who's just angry that they sold bitcoin too early, or the one where Bitfinex'ed takes a dramatic hero stance on Twitter account deletion.
Disclosure: At the time of writing the author holds ETH, IOTA, ICX, VEN, XLM, SALT, BTC and NANO.
- SEC crackdown on Binance, Kraken – What it means for Aussie investors
- Sam Bankman-Fried found guilty – what it means for Australian FTX victims
- Bitcoin’s price soars over 10% on ETF rumours – here’s why
- New regulations for Aussie crypto exchanges: What it means for investors
- Sam Bankman-Fried’s FTX trial starts tomorrow – what it means for FTX customers