The exchange Bitfinex claims to have fully repaid its 2018 loan from its sister company, Tether Ltd. This line of credit is the focus of attention as it threatened the integrity of the Stablecoin Tether (USDT) and represented a systemic risk for the entire market.
Bitfinex rembourse Tether Ltd
In April 2019, the New York State Attorney General (NYAG) filed a lawsuit accusing the Bitfinex exchange of using the reserves of its sister company Tether Ltd to cover a loss of $ 850 million.
Thus, Tether Ltd, the company behind the stablecoin of the same name, has long been accused of lacking transparency about its reserves . Indeed, the company Tether Ltd must hold funds to guarantee the convertibility and the value of the Tether since 1 USDT = 1 USD .
In a brief statement on Friday February 5, the Bitfinex company claims to have fully repaid its loan to Tether. A final payment of $ 550 million definitively closes the repayment of a loan of $ 900 million from a line of credit first issued in 2018.
We can read in the statement:
“Bitfinex made this payment in fiat currency transferred to Tether’s bank account. All interest owed on the loan has been paid. The loan has now been prepaid and fully repaid and the line of credit has been canceled . ”
However, iFinex – the parent company of Tether and Bitfinex – still faces multiple lawsuits . This line of credit remains at the center of a lawsuit that accuses Bitfinex of market manipulation during the 2017 bubble.
Last month, iFinex also requested that a trial date be pushed back so that the company can produce the documents requested by the attorney general’s office.
Although iFinex’s legal issues don’t go away immediately. Bitfinex and Tether CTO Paolo Ardoino appear to have won a victory over Tether truthers who believe stablecoin presented significant systemic risk to the cryptocurrency market .
But not everyone is of the same opinion. According to Rohan Gray, law professor at Willamette University, it would be a big mistake to adopt an “all’s well that ends well” view even if the repayment has taken place. He added :
“The primary concern that Tether’s assets are not fully secured remains, and its opaque relationship with Bitfinex and certain banking partners remains problematic from an ethical and legal perspective. “