According to reports by New York Attorney General’s Office (NYAG), Bitfinex borrowed about $700 million from Tether in the early part of the year, through a line of credit. The exchange company needed the credit to make up for funds seized by authorities in three different countries. The funds were seized from Bitfinex’s payment processor, Crypto Capital, leaving Bitfinex with an $850 million hole to fill.

On Tuesday the exchange announced that it has been able to transfer $100 million to Tether from its account. The announcement stated that “Bitfinex made this payment in fiat wired to Tether’s bank account.”

It also added that: “This amount was not yet due to be paid to Tether under the facility, but Bitfinex has made the prepayment based upon its financial position at the end of the second quarter of 2019.”

Speaking more about the loan, the announcement reads: “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.”

Tether and Bitfinex can easily be described as sister exchanges as they have both shared top executives and shareholders. The two companies, however, insists they are distinct and separate firms.

Legal Issues

The parent firm of Bitfinex, IFinex, and several other entities are currently in a legal brawl with the NYAG’s office. The NYAG is accusing the company of covering up its $850 million loss.

IFinex has filed a dismiss motion, backing it up with claims that the NYAG does not have the jurisdiction nor enough evidence to back up its allegations. The NYAG’s office will have to file its opposition motion before July 8 and iFinex will have until July 22 to file a response. Attorneys for both parties are expected in court on 29 July.


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