Bitfinex repays part of Tether loan, but has to deal with new problem

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Bitfinex is making good on its promise to repay Tether for bailing it out after it suddenly came up $850 million short last year. The cryptocurrency exchange has announced that it had delivered $100 million to the stablecoin project to pay back $700 million it had borrowed, bringing to a total $200 million it has turned over since the loan was signed in July of last year. The first $100 million payment was made shortly after Bitfinex and Tether agreed to the loan’s parameters.

Bitfinex announced the latest payment on its website last Friday, explaining, “Bitfinex is pleased to announce that on Friday, February 28, 2020, it repaid $100,000,000 of the outstanding loan facility to Tether. Bitfinex made this payment in fiat wired to Tether’s bank account. This payment is all on account of principal [sic]. Interest on all amounts due under the facility agreement has been prepaid up to March 2020.”

Bitfinex had been using the services of Crypto Capital to help manage its funds, but the latter suddenly absconded with the company’s money, asserting that its own assets had been frozen by financial regulators in several countries. That assertion has been questioned, as have Bitfinex’s accounting practices. The company, along with Tether, are owned by iFinex, Inc., which has been accused of trying to cover up the losses through the use of the internal loans. The losses occurred in the wake of falling BTC prices and an alleged 2016 hack of the exchange.

It isn’t clear whether or not the repayment will help to relieve the pressure felt from a growing number of lawsuits, or if it will only make things worse. After all, questions about how it could come up with $100 million in cash less than a year after paying well over $100 million in cash will almost certainly come up.

We are investigating what seems like a distributed denial-of-service (DDoS) attack. We will keep everyone updated on here and our status page https://t.co/u3pYCVVGQq as we know more.

— Bitfinex (@bitfinex) February 28, 2020

This isn’t the only issue the exchange is having to deal with right now. Last Friday, Bitfinex reported that it was suffering from a dedicated denial of service (DDoS) attack on its servers. It said on Twitter, “We are investigating what seems like a distributed denial-of-service (DDoS) attack. We will keep everyone updated on here and our status page https://bitfinex.statuspage.io/ as we know more.”

CoinDesk caught up with the firm’s chief technology officer, Paulo Ardoino, later, who explained that the “attacker tried to concurrently exploit several platform features to increase load in the infrastructure.” He added, “We use a variety of different prevention mechanisms to guard against such a Distributed-Denial-of-Service (DDoS) attack. Still, the huge number of different IP addresses used and the sophisticated crafting of the requests towards our API v1 exploited an internal inefficiency in one of our non-core process queues.”

Bitfinex wasn’t the only exchange to be targeted. The OKEx exchange reported two such attacks on Thursday and Friday, with OKEx CEO Jay Hao confirming the activity through his Weibo account.

DDOS attack on OKEx yesterday pic.twitter.com/D2P7yL0wu7

— Matthew Graham (@mattyryze) February 27, 2020

In both cases, it appears that no permanent damage was done, and downtimes to correct the issues were limited. Hao later jumped on Twitter to offer a bounty if someone unmasked the person or persons behind the DDoS, stating, “Plus a message to any team who got paid to do this (also to @bitfinex), if you’re willing to cooperate with @OKEx team and expose the malicious buyer of the DDOS attack with evidence, I’ll personally double pay you. #DoTheRightThing for the industry.”