Bitfinex, one of the oldest crypto trading platforms, closed the books on a loan facility from sister company Tether (USDT).
Bitfinex announced on its website on Feb. 5 that it had closed the books on its loan from Tether. The company stated that it wired $550 million in fiat to Tether’s account. This pays off all interest due. Following the payment, the line of credit from Tether “has been cancelled.”
End of a Curious Saga
The payback closes a long chapter in cryptocurrency history. Bitfinex is one of the oldest cryptocurrency exchanges on the market. It was founded in 2012, and quickly made a name in the young industry.
Tether’s USDT, which is one of the oldest stablecoins, sprang from a whitepaper in 2012. USDT finally went public, on Bitfinex, in January 2015.
The two companies share the same management. As a result, the relationship between the companies has been called into question. This problem came to a head in April 2019, when an audit found that Tether’s USDT stablecoin was not covered 100% by fiat, as Tether claimed.
Tether admitted that it lent $850 million to Bitfinex to cover losses from theft by Crypto Capital. Unfortunately for iFinex, management lost more than sentiment, however. The attorney general of New York filed charges against iFinex for hiding the loan. In response, Bitfinex spent the next year and a half very publicly making payments to Tether.
Then There’s the KuCoin Incident
In September 2020, hackers stole more than $20 million in USDT from KuCoin exchange. Other exchanges subsequently froze millions of dollars worth of Tether in several addresses linked to the attack. Bitfinex alone froze 13 million USD on EOS.
An outcry from crypto enthusiasts leery of the centralized power of exchanges followed. However, Bitfinex CTO Paolo Ardoino pointed to the responsibility that a stablecoin company has “toward users, regulators and law enforcement.” The coiins were subsequently replaced.
Warm Fuzzy Feelings for Bitfinex
The crypto community noticed the repayment. For example, Twitter user Gabor Gurbacs made a point written often about Bitfinex’ efforts.
Closing the loan may clear the air with long-term cryptocurrency holders. For the many newcomers to the industry, though, the pay-back may be the first they have heard of the saga. As Bitfinex moves on, it might also be the last.