- Bitfinex has paid a sum of $100 million to Tether as a part of the $700 million loan
- The firm has also prepaid all interest accrued under the loan up to June 30th, 2019
- The company is also seeking dismissal of the case which is going on with the NYAG office
Bitfinex, one of the most infamous cryptocurrency exchanges was accused of hiding a loss of about $850 million in client and corporate cash from its payment processor Crypto Capital. The exchange, later, went on to borrow a huge sum of $700 million from stablecoin firm Tether to fill the gap in the books via a line of credit in early 2019. The exchange on Tuesday said that it has started paying back the $700 million loan to its sister company.
According to the announcement, Bitfinex said that it has paid $100 million of the total $700 million loan to the stablecoin operator. The payment was made via a wire transfer to the company’s bank account. This was, however, an early payment since the amount wasn’t due yet to Tether under the facility. Bitfinex says they have made the pre-payment based on their financial position at the end of the second quarter of 2019. The post also mentions in the end that:
“Also on July 1st, Bitfinex fully prepaid all interest accrued under the loan facility to Tether up to the end of day on June 30, 2019, also in fiat.”
Bitfinex and Tether have always been different institutions, but they do share a long line of executives and shareholders. Tether’s USDT token is supposed to be backed by the US dollar, but an outstanding loan to an affiliated company meant that a portion of the collateral was replaced with debt. As Blockchain Reporter reported earlier, Tether, reportedly only has 74 percent of its tokens backed by fiat currency.
Legal Battle on the Way
The exchange’s parent company iFinex and some other involved parties are amidst a legal fight with the NYAG office over the $850 million cover-up. The alleged parties have argued that the New York Supreme Court does not have proper jurisdiction to charge them and also that the supreme court does not have personal or subject matter jurisdiction and cannot be appealed to. This comes from the fact that both the companies do not operate in the state of New York and the investors in question were not in the state as well.
The NYAG’s office has until July 8 to file the opposition and iFinex and its affiliated companies will be able to file their own response by July 22. The hearing of the motion to dismiss the case is scheduled for July 29.