Zhao Dong, a famed Chinese OTC bitcoin trader and a shareholder in the world’s leading crypto exchange Bitfinex, took to the social media site Weibo on Monday claiming that it was a fake news that Bitfinex has built a relationship with HBSC, and the assets of the exchange and its affiliated firm Tether have moved from the Puerto Rican’s Noble Bank to a safer one.
His comments come in the wake of a recent swathe of online rumors that the Hong Kong-based exchange and Tether, the venture behind the U.S dollar-pegged crypto,USDT, were facing insolvency due to their banking partner, the Noble Bank , no longer providing financial services to them. The exchange shares shares management with Tether. Zhao sought to defend the integrity of these two firms’ financial reserves.
An blogger under the name of “Proof of Research” published an article on Medium last Saturday saying that the exchange is no longer solvent and warned users to withdraw their assets now, citing unsubstantiated reports of difficulties processing fiat withdrawals and gaining access to the platform. But now the article has been deleted.
Bitfinex soon pushed back against those accusations and claims. In a blog post released on October 7, the mysterious exchange stated that “Bitfinex is not insolvent, and a constant stream of Medium articles claiming otherwise is not going to change this”. In its defense, Bitfinex disclosed its cold wallet addresses holding bitcoin, ethereum and EOS, which “represent a small fraction” of its cryptocurrency holdings.These cryptocurrencies in total are worth around $1.5 billion, based on data from CoinMarketCap.
It also emphasized that “both fiat and cryptocurrency withdrawals are functioning as normal. Stories and allegations currently circulating mentioning an entity called Noble Bank have no impact on our operations, survivability, or solvency”.
Zhao said in Weibo “ Bitfinex/Tether CFO Giancarlo just showed that they have only 66.78USD in Noble bank accounts. And all their USD assets have already been moved to another safer bank.”
He further explained that “ the assets of Bitfinex and Tether are safe now , and there is no asset deposited in Noble Bank anymore.”
In January, Zhao and Lao Mao, the chief executive of Big.one, have witnessed first hand the balances of Bitfinex and Tether’s respective bank accounts during a meeting in Tokyo with Bitfinex’s chief financial officer, Giancarlo Devasini. Tether’s account in the Noble Bank held $ 1.8 billion USD and Bitfinex held $1.1 billion USD then.
“Once the bank at which the two firms deposit money is leaked, their bank accounts will soon become the regulatory targets of the U.S. financial regulators.” Zhao said. In this regard,Bitfinex has a good reason to be tight-lipped on their banking systems.
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