The crypto exchange Bitfinex claimed on Friday that it had repaid the remaining balance of a $ 550 million loan to its sister company, Tether, the issuer of stablecoin tether (USDT).
In 2018, the exchange borrowed more than $ 600 million from Tether, with which it shares management and ownership. The transaction was made public in April 2019 after the New York Attorney General’s Office (NYAG) alleged that Bitfinex had lost $ 850 million in customer and business funds to payment processor Crypto Capital Corp. , and had used funds from Tether’s reserve to secretly cover the shortfall.
Bitfinex had previously announced the repayment of certain installments of the loan.
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The final payment was made in January and the line of credit opened by Tether in 2018 was canceled, according to the Bitfinex website.
As of April 30, 2019, USDT stablecoin was only backed by around 74% fiat equivalents, according to Tether General Counsel Stuart Hoegner due to the loan and line of credit that Tether opened. to Bitfinex to cover lost funds. Hoegner is also the general counsel for Bitfinex.
But Tether’s Bahamian-based bank Deltec said late last month that Tether stablecoin is fully backed by reserves and the reserve “is more than what’s in circulation.” The bank did not produce a certificate or audit from a neutral third-party auditor to verify the complaint.
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Tether, the most widely used stablecoin, has a total market cap of $ 28.31 billion at the time of writing. Glassnode data shows Tether’s market cap has more than doubled in just five months.
CoinDesk has contacted Deltec for confirmation of the loans paid. At the time of going to press, Deltec had not responded to CoinDesk’s requests for comment.