Bitcoin Exchange Bitfinex and Tether: Court Defers, Investigations Continue | BTC-ECHO
Stable-Coin provider Tether and the bitcoin exchange Bitfinex have reason to breathe easy. Both companies were last involved in a lawsuit with the New York prosecutor. The competent court has now granted a complaint by the defendants. Tether is allowed to use its US dollar reserves for current business.
At the center of the lawsuit was a loan of $ 625 million and a line of credit of another $ 900 million. Tether is said to have granted Bitfinex both to offset payment bottlenecks on the Bitcoin exchange. Brisant: Tether has been suspected for some time, not to have the necessary cash reserves for the cover of their own stable coin. Neither the loan nor the payment bottlenecks were therefore made public. The fact that both companies have the same owners makes the matter no less sensitive.
Tether is allowed to invest again
As a consequence, the prosecutor's office frozen the assets of Tether. However, according to the court order of May 16, Tether may again make investments with their own assets. As the court said, the injunction "should not restrict the ordinary business activities of the parties more than necessary."
The order prohibits primarily the money transfer between Tether and Bitfinex. Beyond ordinary business practices, Tether is prohibited from lending assets to Bitfinex. In addition, Tether may not use its own dollar reserves for payments to employees of the two companies. Wage claims are excluded from this. In addition, documents with relevance to the investigation may not modify the defendants.
Trust in Bitfinex dropped
Especially for Bitfinex the stars are currently not very cheap. To counteract the ongoing liquidity problems, the Bitcoin Exchange has launched an Initial Exchange Offering. The Leo token was actually able to flush $ 1 billion worth of tether (USDT) into the coffers. Whether Bitfinex could regain the trust of the crypto community is questionable.
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