The owner of Bitfinex is thinking about repurchasing $150 million worth of its shares in order to strengthen its operational control over the private company. The issue is more urgent now that regulatory considerations are receiving more attention.
The largest stablecoin supplier in cryptocurrency, Tether Holdings Ltd., shares a board of directors with Hong Kong-based iFinex. They announced their intention to buy 15 million shares at $10 each in a message to shareholders. This accounts for 9% of iFinex’s total outstanding capital, which is valued at $1.7 billion. A money infusion from the company’s affiliates would be advantageous.
The swap agreement with the investing platform BnkToTheFuture was used by shareholders to purchase iFinex stock in 2016. In the same year, Bitfinex was the victim of a cyber attack that resulted in the theft of almost $71 million worth of Bitcoin. The price is currently $3.3 billion. Bitfinex exchange recommended the sale of BFX tokens through BnkToTheFuture, and iFinex accepted the offer in exchange for shares of the company.
The repurchase took place as a result of the company’s recent growth. Despite having the same shareholders as iFinex, Tether claimed in a news statement that the two businesses are separate. The CEO of BnkToTheFuture chose not to provide any additional details.
iFinex said that the transfer of the shares will enhance Bitfinex Group’s regulatory compliance by preventing investors from asking for information disclosure. It is well known that Bitfinex and Tether have previously run into regulatory problems. The corporations were compelled to pay a $42.5 million fine in total by 2021. Allegations that Tether overstated the reserves supporting its USDT stablecoin were the reason for this. One of the most well-known tokens is Tether’s USDT, which has $8.3 billion in circulation. It’s also thought that the company collected $3.3 billion in surplus capital.
Digital tokens known as “stablecoins” retain a 1:1 ratio and are less erratic than the dollar. They are mostly used by traders to move money between exchanges. The increased attention on the cryptocurrency market is a result of businesses breaking the law. The regulation of stablecoins like USDT and their providers has been a top focus in the US, the UK, and the EU.
The situation has further worsened as a result of FTX’s bankruptcy and the lawsuits brought against Sam Bankman-Fried, the company’s founder.
Permission has been given for iFinex and its affiliates to take part in the repurchasing. The Chief Financial Officer of Tether and Bitfinex, Giancarlo Devasini, was identified as a shareholder who is authorized to take part in the transaction.
iFinex wants to obtain as much as is practical. The decision about whether or not to transfer the shares to iFinex must be made by the shareholders by October 24.
The USDT stablecoin from Tether has witnessed a significant increase in circulation, while those of other stablecoins has not. Tether makes a substantial profit because USDT is backed by a reserve of short-term US Treasury notes.
