Cryptocurrency exchange Bitfinex reportedly subpoenaed by top regulator

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• The Commodity Futures Trading Commission has reportedly issued subpoenas to cryptocurrency exchange Bitfinex and Tether, the company behind a digital coin that claims to track the US dollar.
• Recently, Tether severed its relationship with its auditors.
• Both Bitfinex and Tether, which share a CEO, have come under fire for alleged foul play.

The US Commodity Futures Trading Commission has reportedly issued subpoenas to cryptocurrency exchange Bitfinex and Tether, the company behind a digital coin that claims to track the US dollar.

The financial regulator sent out the subpoenas last week to the two firms, which share a CEO, according to a report by Bloomberg News' Matthew Leising, citing a person familiar with the situation.

The news follows an announcement by Tether that it severed its relationship with its auditors.

"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 more criticism of the cryptocurrency. Specifically, accusations that the $2.3 billion worth of USDT are not backed by actual dollars.

Tether's cryptocurrency, called USDT, is pegged to - and supposedly 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.

The cryptocurrency has been controversial. The New York Times reported shortly after the company experienced a hack in November: "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."

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