Bitfinex repaid Tether $100 million of the $700 million it borrowed early last year
You still remember the fumbling story between Bitfinex and Tether about the loan amount of $ 700 million. Recently, Bitfinex announced that it would pay Tether $ 100 million out of the $ 700 million it borrowed early last year. This controversial loan has sparked rumors of insolvency and an investigation from the New York State Attorney General.
The story of lending and borrowing between Bitfinex and Tether does not end
The exchange Bitfinex borrowed money from Tether after it claimed to have had trouble with its banking partners. At that time, Bitfinex claimed that its payment processor, Crypto Capital Corp, had frozen its $ 850 million assets. To ensure solvency, Bitfinex borrowed $ 700 million from Tether, and so on, the story happened.
Bitfinex always assures the public that the loan is legitimate and that it does not threaten Tether’s financial security. Unsurprisingly, the movie has received considerable criticism and has prompted an investigation by New York Attorney General Letitia James.
In July 2019, Bitfinex announced that it had started repaying the borrowed money. And the amount of $ 100 million they paid to Tether today could indicate they are continuing their efforts to resolve the debt.
Bitfinex’s reputation in the cryptocurrency community is significantly reduced
Bitfinex has long been highly controversial among cryptocurrency investors. Put, many people do not trust it due to its cult of secrecy. For example, although it is based in Hong Kong, it has not released the location of servers and infrastructure. Bitfinex is also suspected of having business relationships with shady organizations and is often unaware. Notably, it appears to have entrusted hundreds of millions of dollars to Crypto Capital Corp, in October seeing its owner accused of fraud.
The exchange also has a close relationship with Tether. Tether executives have long stated that USDT stablecoins are fully backed by the dollar, but have never allowed independent auditors to prove their claims. Critics emphasize that, without an audit, Tether would never prove transparent and untrustworthy. Besides, this lack of transparency is an essential issue in New York’s decision to pursue legal action against it and Bitfinex.
It is worth noting that, despite the controversy, Bitfinex has never failed to withdraw money and has a respectable track record of activity. Although no longer a top global exchange by volume, its list of significant trading pairs keeps it a significant player. Perhaps this payment to Tether could be a positive step in restoring its lesser reputation.
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