Crypto exchange Bitfinex announced on Friday that it has repaid its sister company Tether their entire remaining loan balance of $550 million.
“Bitfinex is happy to announce that in January it repaid the remaining balance of $550,000,000 of the outstanding revolving loan facility to Tether,” the company said in a statement. “Bitfinex made this payment in fiat currency wired to Tether’s bank account. All interest due on the loan has been paid. The loan has now been repaid early and in full and the line of credit has been cancelled.”
In 2018, Tether opened a line of credit for Bitfinex worth $900 million, of which the exchange used $750 million. Bitfinex repaid $100 million of the loan in both 2019 and 2020 before this final payment.
Bitfinex also stated that the final repayment was made entirely in fiat currency. Which will add 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 general counsel Stuart Hoegner told The Block that the loan was originally taken out because Bitfinex was in a “short-term need for cash. Tether was prepared to lend on commercially reasonable terms”. However in 2019 the New York Attorney General’s office argued in court documents that the exchange was using this to secretly cover for $850 million in losses. That it accrued when payment processor Crypto Capital seized the funds.
Bitfinex And Tether Lawsuit In New York
Last month, Bitfinex and Tether said they are almost finished producing documents sought by the NYAG. After the crypto firms lost in New York appellate court.
“Bitfinex continues to make progress in its recovery actions against the Crypto Capital group around the world,” the exchange said. “Crypto Capital and related parties victimized Bitfinex. We reserve our rights to seek all available legal remedies against them. We also look forward to continuing our productive and constructive discussions with the New York Attorney General’s Office.”
Bitfinex also noted that the loan was repaid early, saying that it wasn’t due until November of 2021.