Bitfinex Repays A seventh of its $700 Million Loan from Tether

Bitfinex Crypto exchange said on Tuesday that it had begun repaying a loan from its sister company Tether. In early 2019, Bitfinex needed to make up a sum of $850 million which resulted from its payment processor, Crypto Capital, having its funds seized by authorities in three separate nations. According to legal filings by the New York Attorney General (NYAG)’s office, to that effect, they borrowed as much as $700 million from the stablecoin issuer through a line of credit.

The exchange said on Tuesday, it had transferred $100 million from its account to Tether’s: “Bitfinex made this payment in fiat wired to Tether’s bank account,” the announcement read. “This amount was not yet due to be paid to Tether under the facility, but Bitfinex has made the prepayment based upon its financial position at the end of the second quarter of 2019.
“Also on July 1st, Bitfinex fully prepaid all interest accrued under the loan facility to Tether up to the end of day on June 30, 2019, also in fiat,” the exchange added.
Bitfinex’s parent firm, IFinex had been in a legal fight with the NYAG’s office over the alleged cover-up of its $850 million loss. This is along with other affiliated entities as well. Without backing it up, the company claims that the NYAG has neither the jurisdiction nor sufficient evidence to back up its claims and has filed a motion to dismiss. Up until July 8, the NYAG’s office has to file its opposition, and iFinex and its affiliated companies will be able to file their own response by July 22. For both sides, Attorneys are due back in court on July 29.
Over a long time, Bitfinex and Tether have shared key executives and shareholders, though both companies insist that they are different entities. Usually, Tether’s USDT token trades around $1 and is meant to be backed 1-for-1 with U.S. dollars or cash equivalents, but the Bitfinex loan meant a portion of that collateral was replaced with the debt of an affiliated company.

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Credits- Nikhilesh De

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