The Bitfinex Tether scandal continues to grip the cryptocurrency industry. The New York Attorney General announced an investigation into the two firms and we’ve been waiting anxiously for the resolution. But for those of us waiting anxiously, we might have more worry. The bitfinex tether scandal could be much bigger than we though. According to Tyler Swope, a YouTube star, the conspiracy is much bigger and deeper than we first thought.
In his latest video, Tyler Swope, who runs Chico Crypto channel, highlighted the arrest of Reginald Fowler, the part-owner of The Minnesota Vikings, an NFL team. The cause? Operating a shadow banking chain for crypto exchanges.
With closer investigation, it was found that The Block discovered that Fowler’s companies were key partners with Crypto Capital, the Panamanian company that prosecutors allege stole or lost 850 million belonging to BitFinex.
But in a shocker, it seems that Crypto Capital was also in the heart of the QuadrigaCX scandal that erupted earlier this year. This has raised serious concerns on how exchanges handle our money.
Crypto Capital is also allegedly linked extensively with Coinapult, a wallet services provider. Erik Voorhes, the CEO of ShapeShift was one of the founders of Coinapult with Roger Ver.
While all this is happening, a long game is currently being planned. A new angle that could solidify the status of one of the largest and most respected crypto exchanges in the world.
Binance, one of the largest holders of Tether tokens for over a year, has reportedly met with Bitfinex and was assured that the money lost was just FUD. We now know that it wasn’t FUD, They did lose the money to Crypto Capital.
Following this revelation, CZ, the CEO of Binance, announced on Twitter that they were moving funds as a standard operating procedure.
CZ said that they transferred their USDT in one transaction, however, looking into the blockchain, we’ve determined that they moved the USDT tokens to thousands of different addresses. The transactions are all in small amounts, and to different addresses.
The amount of USDT that Binance held in their cold wallets was 100 million dollars lighter. It is possible that these withdrawals happened by clients, forcing the exchange to tap into their cold wallets. However, the more likely story is that the exchange cashed out their tokens. For reference, this happened just a few days ago. There’s no reason they won’t do this again.
If Binance is cashing their USDT tokens, it could spell bad news for the future of USDT. There’s no telling how the markets will react, especially since we’ve found out that USDT isn’t 100% backed by fiat.
This is the golden opportunity for Binance. If Binance created their own stablecoin, that would be light years ahead of the adoption scheme of some coins like USDC, which has Coinbase backing. We could very well see a stablecoin from Binance in the future. What do you think? Would you use it? Let us know what you think on our Facebook Page!