Bitfinex, the fifth largest cryptocurrency exchange by trading volume, has reportedly repaid $750 million, the remainder of its previous loan with Tether.

I told Bitfinex today announced that it paid Tether $550 million in January, after paying $100 million in the past two years.

Bitfinex, which shares its lead with Tether, took some funds out of credit for the digital stablecoin Tether in 2018 after alleging that payments processor Crypto Capital stole $850 million from it.

The New York Attorney General’s Office (NYAG) has been investigating the loan since 2018 on suspicion that Bitfinex was essentially lending itself money to cover this loss.

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Crypto Capital itself is accused of money laundering.

The New York Attorney General’s suit (NYAG) in April 2019 explained:

In order to bridge the gap, Bitfinex and Tether executives engaged in a series of conflicting corporate transactions in which Bitfinex gave itself access to up to $900 million in Tether cash reserves.

Tether has repeatedly told investors for years that it fully supports the $1 to $1 stablecoin.

Stuart Hoegner, general counsel for Bitfinex, told The Block:

The trading platform had a short-term need for cash, and Tether was willing to lend on commercially reasonable terms.

The attorney general’s argument is that using Tether reserves in this way would constitute fraud.

Early in the investigation, Tether admitted in March 2019 that it was not fully backed by dollars, but also by “cash equivalents” and sometimes other assets and receivables.

Paying off the loan does not mean that the legal problems of Tether and Bitfinex are over:

Willamette University Law School Professor Rohan Gray, who is also the vice president of the Global Cryptocurrency Initiative, used the old saying of cryptocurrencies that says:

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Don’t trust anyone, check for yourself.

He told Rohan that there was no reason to trust Bitfinex had actually paid Tether due to its past equivocation over whether Tether was fully backed by the dollar.

He added:

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Even if the payment does happen, it would be a huge mistake to take the view that all is well.

Currently, the primary concern is that Tether’s assets are not fully backed, and its opaque relationships with Bitfinex and Deltec remain ethically and legally problematic.

The term “Deltec” refers to “Deltec Bank & Trust,” an international bank based in the Bahamas that oversees funds backing the digital stablecoin Tether.

Some rumors surfaced that Bitfinex owns a large stake in Deltec Bank, but the bank manager denied the rumors and told that they were not true.

Read also:

The stable digital currency “Tether” is retreating for the first time from its ownership percentage to less than 75%

New update on the Tether case with the New York Attorney General’s office… Details here