Bitfinex Just Repaid Part of Its Loan to Tether Made in 2018

Bitfinex Just Repaid Part of Its Loan to Tether Made in 2018

Cryptocurrency exchange, Bitfinex said in a blog post on February 28, that it has repaid another $100,000,000 of the $700 million outstanding loans it took away from Tether reserve over the last two years. 

The New York State Attorney General, Letitia James said that Bitfinex through its Hong Kong-based parent company, iFinex Inc., which also operates Tether Ltd., commingled corporate and client funds to make up for missing funds in mid-2018, which hasn’t been publicly disclosed.

Bitfinex Lost $850 Million to Payments Partner

According to the Attorney general, the crypto exchange’s problem began at the said year, when it appointed Crypto Capital Corp., a third-party payments processor based in Panama, and handed over $850 million to them in order to process customers-withdrawal requests.

A few months later, Crypto Capital was no longer capable of processing the orders. The payment processor didn’t lose the $850 million, rather it was seized and safeguarded, Bitfinex said, adding that it is actively working to recover the funds back. 

“Both Bitfinex and Tether are financially strong—full stop,” Bitfinex assured, at that time. Fast forward to November of that same year, Bitfinex said it permanently lost access to the $850 million in question, as per the source close to the Investigation from the attorney general’s office.

Following the failed attempt by the exchange to recover the funds, it engaged in a series of maneuvers with Tether, draining away about $700 million from Tether’s reserves, which incurred a huge gap on Tether reserve, according to the sources.

Bitfinex Second Move to Repay Tether

Today’s repayment which was processed in fiat wired to Tether’s bank account now accounts for $200 million pay off of the outstanding loan. As of July 2019, the crypto exchange announced it repaid the same amount ($100,000,000) to Tether.

Meanwhile, “this payment is all on account of the principal. Interest on all amounts due under the facility agreement has been prepaid up to March 2020,” the exchange announcement disclosed today.