Bitfinex, one of the oldest cryptocurrency trading platforms, has closed a line of credit from its subsidiary Tether (USDT).
Bitfinex announced on its website on Feb.5 that closed a loan provided by Tether. The company said it transferred $ 550 million in fiat currency to Tether. This will pay off all interest due. Upon payment, the credit line from Tether was "canceled".
The end of a curious saga
The payback closes a long chapter in the history of cryptocurrencies. Bitfinex is one of the oldest cryptocurrency exchanges on the market. It was founded in 2012 and quickly gained recognition in the young industry.
USDT from Tether, which is one of the oldest stablecoins, originated in 2012 on technical paper... Finally, in January 2015, USDT went public on Bitfinex.
The two companies share a common leadership. As a result, the relationship between the companies was in question. This problem was exacerbated in April 2019 when an audit found that the stablecoin Tether USDT was not 100% covered by fiat, as Tether claimed.
Tether admitted that it had lent Bitfinex $ 850 million to cover losses from the theft of Crypto Capital. Unfortunately for iFinex, however, the management lost more than just sentimentality. New York's attorney general has charged iFinex with concealing a loan. In response, Bitfinex spent the next year and a half making public payments to Tether.
KuCoin incident
In September 2020, hackers stole over 20 million USD in USDT from the KuCoin exchange. Other exchanges subsequently froze millions of dollars worth of Tether at multiple addresses associated with the attack. Bitfinex alone froze $ 13 million on EOS.
This was followed by a protest from crypto enthusiasts who questioned the centralized power of exchanges. However, Bitfinex CTO Paolo Ardoino pointed out the responsibility that the stablecoin company has "to users, regulators and law enforcement agencies." Subsequently, the coins were replaced.
Tether USDt is a centralized stablecoin as others. We have duties towards users, regulators and law enforcement.
We have anyway strict rules and parameters for action. We won't slip outside those https://t.co/uGUHNtFSqh- Paolo Ardoino (@paoloardoino) September 26, 2020
Congratulations to Bitfinex
The crypto community has noticed the redemption. For example, Twitter user Gabor Gurbax has written frequently about Bitfinex's efforts.
> Wow. @bitfinex repaid the remaining balance of $ 550 million of their outstanding loan to @Tether_to.
> They got robbed by Crypto Capital then used their earnings to repay the loan and make everyone happy. Are they still the bad guys? Narrative violation. Haters in disbelief! pic.twitter.com/MhWMkYOzOm— Gabor Gurbacs (@gaborgurbacs) February 6, 2021
Closing the loan could clarify the situation with long-term cryptocurrency holders. However, for many newcomers to the industry, ROI may be the first thing they hear about this saga. As Bitfinex moves forward, it could also be the last one.