Cryptocurrency exchange Bitfinex reportedly subpoenaed by top regulator

The Commodity Futures Trading Commission has issued subpoenas to Bitfinex, a cryptocurrency exchange, and Tether, the company behind a digital coin that claims to track the US dollar, Bloomberg reported Tuesday.
Tether recently severed ties with an auditor.
Bitfinex and Tether, which share a CEO, have been accused of fraudulent behavior.

The US Commodity Futures Trading Commission in December issued subpoenas to Bitfinex, a cryptocurrency exchange, and Tether, the company behind a digital coin that claims to track the US dollar, Bloomberg's Matthew Leising reported Tuesday, citing a person familiar with the situation.

Over the weekend, Tether, which shares a CEO with Bitfinex, announced it had severed ties with its auditor Friedman LLP.

Tether says its cryptocurrency, called USDT, is pegged to and backed by the dollar. It is meant to function as a "stablecoin," a cryptocurrency that allows you to avoid the volatility of bitcoin but still have the operability of a cryptocurrency.

"Given the excruciatingly detailed procedures Friedman was undertaking for the relatively simple balance sheet of Tether, it became clear that an audit would be unattainable in a reasonable time frame," Tether said in a statement.

The ending of the audit has fueled criticisms of the cryptocurrency company and led to accusations that the $2.3 billion worth of USDT currently in circulation is not backed by actual dollars.

The company says its latest official audit was in March, when only $44.7 million worth of USDT were in circulation.

The New York Times reported shortly after the company experienced a hack in November that "one persistent online critic, going by the screen name Bitfinex'ed, has written several very detailed essays on Medium arguing that Bitfinex appears to be creating Tether coins out of thin air and then using them to buy Bitcoin and push the price up."

The CFTC declined to comment to Bloomberg.

"We routinely receive legal process from law enforcement agents and regulators conducting investigations," Bitfinex and Tether said in an email to Bloomberg. "It is our policy not to comment on any such requests."

Still, the fact that the subpoenas were issued in December is something

This post was updated to reflect revisions in Bloomberg's report.