The repayment is ahead of schedule since Bitfinex had until November 5, 2021. The exchange’s financial performance made it possible to settle the loan balance early. Bitfinex general counsel Stuart Hoegner states that:
Bitfinex, Tether fraud case probe
The loan was at the center of a fraud case by the New York Attorney General’s office three years ago. In 2018, it emerged that Bitfinex borrowed $750 million Tether, the issuer of USDT stablecoin. The two companies share executives and ownership. NYAG alleged Bitfinex lost $850 million in customer and corporate funds to payment processor Crypto Capital Corp. The exchange then used Tether’s reserve to cover the shortfall secretly. The AG’s office requested Bitfinex and Tether to produce documents involving the transaction. Bitfinex later moved to the New York Court of Appeal seeking suspension orders but lost the case. In January 2021, Bitfinex and Tether claimed they were close to producing all documents sought by the NYAG. Tether, which is the most-used stablecoin, has a total market capitalization of $27.8 billion at the time of writing. Data by CoinMarketCap indicates since September, the asset’s market cap has surged by 106.69%.
Tether transparency issues
The stablecoin has been at the center of controversy in the recent past, with Bitfinex executives dismissing claims USDT is used to manipulate the price of Bitcoin. Bitfinex CTO Paolo Ardoino and Hoegner denied reports that Tether might have been used to stabilize and manipulate the price of Bitcoin. They note that Bitcoin is among the reserve assets Bitfinex uses to back USDT. Tether is also facing further transparency issues amid reports that only 74% of USDT is backed. The exchange maintains the stablecoin has backing from cash, cash equivalents, and BTC.
