Ikenna Uwakwe has been a writer since he could hold a pen. Having a lot of literary works in his portfolio including Poems, Articles and Essays. He enjoys a natural likeness for anything related to technology. His Educational background includes computer science and programming. As a seasoned cryptocurrency enthusiast with a professional writing career path of over two years of blogging for blockchain related companies. Working with various Fintech startups in the past, has aided him to better understand what IT proponents as well as financial Investors look out for.
Following the 2016 cyber attack on top cryptocurrency exchange – Bitfinex, that brought about its loss of $700 million Customer funds. The number one Asian crypto trading platform claims to have relinquished part of its loan from Tether.
A massive hit on the Bitfinex servers by means of a DDos (Distributed Denial of Service) attack rendered the exchange almost helpless as Bitfinex registered a humongous loss of Customer funds to the tune of $700 million USD and in-turn, costing the exchange platform its reputation.
In light of this incident, Bitfinex reaches out to Stablecoin management firm – Tether in Q1 2019. And as an affiliate company to Bitfinex, the cryptocurrency minting company that backs its Tether Tokens did not hesitate to render a helping hand.
Nevertheless there happen to be recent findings that connects the Exchange Platform’s tremendous loss to a fault from its payment processing partner company – Crypto Capital. As a result of its funds been confiscated by the government of 3 different nations amounting to an $850 million USD loss on the part of the Cryptocurrency exchange platform – Bitfinex.
Several months after these events, the Bitfinex exchange reports that it has paid off a total of one-seventh of this loan from Tether to the totality of $100 million USD. Furthermore in a press announcement by the exchange platform on Tuesday, Bitfinex asserts that it has made this payment in fiat currency wired directly to the Tether bank account. Stating in its press release, Bitfinex re-affirms this saying:
“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.”
Bitfinex also confirms that it has remitted cash deposits with respect to the interests amassed over the span of the loan period, as stated in the report:
“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.”
The department of the New York Attorney General spear-headed by Democrat Letitia James has accused the Bitfinex exchange of hiding behind the shadows of Tether’s funds to cover up loss of co-mingled client and corporate funds within the range of $850 million USD since mid-2018. After a court filing by the Democrat, James points out that she had obtained a court order against the proprietors of the Bitfinex exchange – iFinex.inc:
“New York state has led the way in requiring virtual currency businesses to operate according to the law. And we will continue to stand-up for investors and seek justice on their behalf when misled or cheated by any of these companies.”
Subsequently, iFinex.inc has filed a counter motion in dismissal of this claim indicating that the company the New York Attorney General’s office does not have evidential prove, not yet the jurisdiction to back such allegations.
But the truth still remains that the Bitfinex exchange as well as its parent company – iFinex.inc has gone through extreme measures to indemnify its clients from this catastrophic loss. Therefore the question here stands to be: why blame them for seeking a loan?