The leading “stablecoin” is no longer backed by $1 for every coin

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A New York judge has ordered Bitfinex, a cryptocurrency exchange that shares a parent company with the 'stablecoin' Tether, to turn over a bunch of documents to New York Attorney General Letitia James. James announced the order in a Thursday press release. She also unsealed her office's legal filings requesting the order.
Those documents suggest that Bitfinex could be in serious financial trouble. The company has been unable to recover $851 million in cash it had entrusted to a little-known Panamanian payment processor called Crypto Capital. James' office writes that information uncovered during the investigation 'raised serious questions about the viability of Bitfinex as an ongoing concern.'
In a statement, Tether said that the filings from New York's attorney general were 'written in bad faith and are riddled with false assertions.' According to Tether, the missing $851 million 'are not lost but have been, in fact, seized and safeguarded.' The company added that 'both Bitfinex and Tether are financially strong.'
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