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March 13, 2024
Bitfinex CFO: funds unfrozen in a "few weeks"; shareholders aren't worried
As the Bitfinex scandal continues to unfold, two of the firm's shareholder come out to shed light on the situation and provide support for the embroiled exchange.
Up there amongst this years, biggest crypto controversies is the recent Bitfinex/Tether fiasco which is currently still playing out. Once again the divisive stablecoin and its native exchange Bitfinex is being targeted for allegations of fraud, this time not by the crypto community, but the New York Attorney General’s office (NYAG) who are investigating the firms and their alleged connection to the defrauding of NY-based Investors.
The investigation was launched shortly after Bitfinex dipped into is USDT stabilizing cash reserves in order to regain what they dub as “temporary” losses of $850 million which, according to the firm, is currently frozen within a Panama based account.
However, neither the market nor the Bitfinex shareholders appear to be too bothered by this latest debacle.
Speaking to Coindesk, one such shareholder, Zhao Dong, remains resolute about Bitfinex’s solvency.
Dong attempted to reassure the crypto community of this apparent solvency, relaying that the chief financial officer of Bitfinex Giancarlo Devasini has assured him that this situation is “temporary” and the exchange only requires a “few weeks” to unfreeze the $850 million in currently inaccessible funds.
Devasini apparently told Dong that the funds are currently “stuck” with a Panama based third party payment processor known as Crypto Capital:
“The funds were in several banks in Poland, [the] U.S. and Portugal, so I’m not sure but that’s what I heard,” Zhao said.
The New York Attorney General’s office noted that the missing funs belong to both Bitfinex’s corporate accounts, as well as its customers. However, Zhao alleges that the funds belong entirely to the customers, alluding to the fact that funds may have been wrongly appropriated by the US government:
“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 NYAG investigation, Bitfinex borrowed 700 million from Tether’s reserves in order to cover up discrepancies after losing access to $850 million sent to the Panama based Crypto Capital payments processor.
Zhao stated that he remained unconcerned about the allegations of covering up the 850 million in losses citing previous debacles that Bitfinex bounced back from:
“They did very well [after previous debarcles] so I trust them.”
Fair enough…
Another shareholder known as Tian Jia is also continuing to support Bitfinex, stating:
“They’re still there, they’re trying to solve problems.”
Zhao continued to argue that Tether's highly divisive reserve model is safer than that of traditional banks:
“Tell me, which bank is 100 percent reserved? Not even Tether is … fully reserved, it’s much, much better than other banks,”
“Most banks only have 2-3 percent of reserves, for Tether even the $800 million [that] is lost, even that is [not all of their funds], they have 70 percent reserved,” he said.
