Whether cryptocurrency enthusiasts believe the stablecoin controversy is worrisome or mere FUD, the news surrounding the $850 million of Bitfinex funds locked up has shaken the markets. Now, digital asset traders are closely monitoring the large premium on Bitfinex, where the price of BTC is trading for $300 more than on most spot markets. The publicly known Bitfinex cold storage wallet is also being monitored as large sums of BTC have left the address since the announcement last week.
Bitfinex Cold Storage Drops Below 90K BTC Following Controversial News
On April 25, the New York Attorney General’s (NYAG) office issued a press release concerning court documents that accuse the cryptocurrency exchange Bitfinex of losing $850 million and using the stablecoin operation Tether to cover it up. Bitfinex claims the NYAG court filings are “riddled with false assertions” and the chief financial officer, Giancarlo Devasini, recently told a Bitfinex shareholder the trading platform “needs a few weeks and the funds will be unfrozen.” Since then, however, the U.S. Attorney General’s Office charged two individuals for allegedly providing shadow banking services to cryptocurrency exchanges including Bitfinex. Additionally, it’s been revealed that the tether stablecoin (USDT) is only backed by 74% of collateralized USD reserves. All of this news initially shook cryptocurrency markets, but most digital assets have since recovered much of what they lost.
The price of bitcoin core (BTC) slid to $5,152 on April 25, 2018, which can be seen in this 7-day chart.
While the community debated the subject heavily on crypto Twitter, millions of dollars worth of BTC left the exchange’s publicly known cold storage address.