After New York’s attorney general (AG) went after Bitfinex last week for its alleged involvement in the cover-up of major losses of Tether’s USDT stablecoin, the company has had to go on the defensive, reassuring the world that everything is in order. It reportedly wants to show everyone that the cryptocurrency exchange has the $850 million in client and corporate funds, but needs a couple of weeks for the money to be unfrozen.
Both Bitfinex and Tether share some of the same management team, something that the crypto community has always questioned. After the announcement last week that Bitfinex may have tried to sweep the loss under the carpet by using Tether, things became even more heated, but two Bitfinex shareholders have stepped up to try and assuage any concerns.
One, Zhao Dong, says that he was told by the chief financial officer of Bitfinex, Giancarlo Devasini, that the funds are in “several banks in Poland, [the] U.S. and Portugal” and that the exchange “need[s] a few weeks and the funds will be unfrozen.” He added that the missing funds were those of customers, explaining, “What the information I have right now is there are no losses, but the funds belong to clients. If the U.S. government seized the funds, they should know, the funds doesn’t belong to Bitfinex or Tether, it’s the clients’ money.”
According to the AG, Bitfinex has not been able to access $850 million that had reportedly been given to its partner, Crypto Capital. As a result, the exchange borrowed $700 million in Tether to cover the losses. When the news broke, the crypto market took a dive and there was a massive shift away from USDT in favor of other stablecoins.
According to Zhao, there’s no reason to be concerned. He states, “They did very well [after previous calamities] so I trust them.” The shareholder was referring to the Bitfinex hack in 2016, as well as to the trouble it saw when Well Fargo froze some of its accounts the following year.
Another shareholder, Tian Jia, reiterated Zhao’s confidence. He said that he has been in communication with several Bitfinex executives and told CoinDesk, “They’re still there, they’re trying to solve problems.” He added, “Because it is customers’ money, it’s not stolen cryptocurrency, it’s fiat. It can’t be stolen. It’s only frozen by the [regulators], and [Bitfinex is] trying to get it back by approaching Panama and the [U.S. Attorney General]. They have been communicating all along.”
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