Cryptocurrency exchange Bitfinex has allegedly paid back another $100 million to Tether, thus now covering more than 20 percent of its $700 million loan facility they took last year. The company started to repay the loan in July 2019 by transferring $100 million to Tether’s reserves.
Bitfinex stated that the second repayment was also done entirely in fiat currency, which adds more backing to USDT tokens which saw its fiat coverage drop to below 80 percent following the credit line given to its sister exchange.
“Bitfinex is pleased to announce that on Friday, February 28, 2020, it repaid $100,000,000 of the outstanding loan facility to Tether. Bitfinex made this payment in fiat wired to Tether’s bank account. 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 digital asset platform said.
Bitfinex, who shares a parent company with Tether, is accused of using $700 million from the stablecoin reserves to cover up losses of $850 million. The crypto exchange defended itself, saying the money was deposited with a Panamanian-company called Crypto Capital but then was seized and safeguarded in several jurisdictions, including Poland, Portugal, the UK, and the United States, all through no fault of Bitfinex.
Bitfinex has repeatedly questioned the New York Attorney General’s oversight authority and accused the office of using “a highly misleading factual presentation,” when it described its loan as nothing more than an IOU from Bitfinex “that seemed unlikely to be repaid.”
Bitfinex and Tether also face another class-action lawsuit accusing them of fraudulently inflating the cryptocurrency market by printing uncovered USDT tokens in what the plaintiffs describe as “the biggest bubble in human history.” They also claim that both partners colluded with others to artificially inflate Bitcoin prices, which shot higher just after the loss of Bitfinex funds was revealed.
However, Bitfinex has requested that the entire proceeding be dismissed as the frivolous suit lacks a factual or legal basis, and as such, has little or no chance of being won. Should the decision wouldn’t go Bitfinex’s way, it would have to admit or deny the allegations and then undergo a lengthy, expensive process during which it should prove that Bitcoin’s skyrocketing gain wasn’t caused by shady activities on its platform.