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Crypto Market Roiled by New Allegations Against Tether, Bitfinex

  • Bitcoin drops as case alleges that Tether’s cash was misused
  • Defendants allegedly obscured their loss of money last year
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One of the world’s most widely traded virtual currencies faces renewed doubts about its stability, after New York’s top cop accused the coin’s issuer of participating in a cover-up to hide the loss of about $850 million in client and corporate funds.

The allegations against Tether and the operator of cryptocurrency exchange Bitfinex, announced by the New York attorney general on Thursday, have revived doubts about Tether’s claim that each of its so-called stablecoins is backed by $1 of assets -- a feature that gives the coins a central role in crypto markets around the world.