Bitfinex, one of the oldest crypto trading platforms, closed the books on a loan facility from sister company Tether (USDT).
Bitfinex announced on its website on February 5 that it had closed Tether’s loan books. The company said it deposited $ 550 million in Tether’s account. This pays off any interest due. After the payment, the credit line was “canceled” by Tether.
End of a curious saga
The repayment closes a long chapter in the history of cryptocurrency. Bitfinex is one of the oldest cryptocurrency exchanges on the market. It was founded in 2012 and quickly made a name for itself in the young industry.
Tether’s USDT, one of the oldest stable coins, emerged from a white paper in 2012. USDT finally went public on Bitfinex in January 2015.
The two companies share the same management. As a result, the relationship between the companies has been called into question. That problem came to a head in April 2019 when an audit found that Tether’s USDT stablecoin was not 100% funded by Fiat, as Tether claimed.
Tether admitted loaning $ 850 million to Bitfinex to cover losses from theft by Crypto Capital. Unfortunately for iFinex, however, management lost more than just mood. The New York Attorney General brought charges against iFinex for hiding the loan. In response, Bitfinex made very public payments to Tether for the next year and a half.
Then there is the KuCoin incident
In September 2020, hackers stole more than 20 million USDT from KuCoin Exchange. Other exchanges have frozen tens of millions of dollars worth of tether at multiple addresses linked to the attack. Bitfinex alone has frozen $ 13 million at EOS.
An outcry from crypto enthusiasts followed, making fun of the centralized power of exchange. However, Bitfinex CTO Paolo Ardoino pointed out the responsibility that a stable coin operated company has “towards users, regulators and law enforcement agencies”. The coins were then replaced.
Tether USDt, like others, is a centralized stablecoin. We have obligations towards users, supervisory authorities and law enforcement authorities.
We have strict rules and parameters for action anyway. We will not slip outside of this https://t.co/uGUHNtFSqh
– Paolo Ardoino (@paoloardoino) September 26, 2020
Warm fuzzy feelings for Bitfinex
The crypto community noticed the repayment. For example, Twitter user Gabor Gurbacs made a point that was often written about Bitfinex’s efforts.
> Wow. @bitfinex has repaid the remaining $ 550 million of their outstanding loan to @Tether_to.
> They were robbed by Crypto Capital and used their proceeds to pay back the loan and keep everyone happy. Are you still the bad guys? Narrative violation. Haters disbelieving! pic.twitter.com/MhWMkYOzOm
– Gabor Gurbacs (@gaborgurbacs), February 6, 2021
Closing the loan can clear the air for long-term cryptocurrency holders. However, for the many newbies to the industry, the Payback may be the first they heard of the saga. If Bitfinex continues, it could be the last.
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