Bitfinex Says It Repaid Tether for $550M Loan at Center of NYAG Probe

Bitfinex crypto exchange announced on Friday that it had repaid the balance of a USD 550 million loan to its sister company Tether, the issuer of the Tether (USDT) stablecoin.

In 2018, the exchange borrowed more than $ 600 million from Tether with which it shares executives and owners. The transaction was disclosed in April 2019 after the New York Attorney General (NYAG) alleged Bitfinex had transferred $ 850 million in customer and corporate funds to payment processor Crypto Capital Corp. lost and used funds from Tether’s reserve to secretly cover the shortfall.

Bitfinex had previously announced that it would repay certain tranches of the loan.

Final payment was made in January and the line of credit Tether opened in 2018 was canceled, according to Bitfinex’s website.

As of April 30, 2019, only 74% of the USDT stablecoin was covered by fiat equivalents due to the loan and a line of credit Tether opened for Bitfinex to cover the funds lost, according to Stuart Hoegner, General Counsel of Tether. Hoegner is also the General Counsel of Bitfinex.

Bahamas-based bank of Tether, Deltec, said late last month that the Tether stablecoin is fully backed by reserves and the reserve is “more than what is in circulation”. The bank has not provided a certificate or a neutral auditor’s audit to verify the claim.

The most widely used stablecoin, Tether has a total market cap of $ 28.31 billion at the time of writing. Data from Glassnode shows that Tether’s market cap more than doubled in just five months.

CoinDesk reached out to Deltec to confirm the loans paid. At the time of going to press, Deltec had not responded to CoinDesk’s requests for comments.