Major Exchange Bitfinex confers Move to Switzerland

One of the biggest cryptocurrency exchanges in the world - Bitfinex is managed ig going to move out of its current base in Hong Kong over to Switzerland
29 March 2018   1284

Handelszeitung (the German-language Swiss newsweekly) is declaring that Hong Kong-based Bitfinex is conducting negotiations with Swiss officials over a move to Europe. Switzerland is at the top of the list of potential directions and London is also being reputed as an alternative, the report added.

Bitfinex CEO Jean-Louis van der Velde is explaining the potential move. According to his report, ‘several meetings’ between Bitfinex representatives and Switzerland’s State Secretariat for International Financial Affairs (SIF) are already held. The exchange has also communicated with Johann Schneider-Ammann (the head of the Switzerland’s Federal Department of Economic Affairs, Education and Research). This year Schneider-Ammann has been previously summoned on Switzerland to set its industry-friendly adjusting climate in order to become the world`s crypto nation.

The chief of Bitnex appraised the talks with Swiss authorities as constructive and efficient:

"We are looking for a new permanent home for Bitfinex and the parent company iFinex, where we want to merge the operations previously spread over several locations."

Bitfinex alongside its parent company iFinex Switzerland could found a new AG (Aktiengesellschaft) or German for a public limited company that sees its shares traded on a public exchange. At the moment iFinex is located in the British Virgin Islands.

The significant move from Asia to Europe can reportedly see iFinex’s legal and finance departments operate from Switzerland. Bitfinex was strongly criticized for its connection to Tether (an iFinex subsidiary). Bitfinex and Tether have also got summons from the US Commodity Futures Trading Commission (CFTC), investigation which now sees Bitfinex looking to comply with all regulatory demands in Switzerland.

Jean-Louis van der Velde also added:

"We want to be the most transparent of all exchanges and meet the requirements of the Swiss regulator."

Binance announced its foray into establishing a base in the European nation of Malta which is undergoing its own effort to become the world’s ‘blockchain island’.

Tether to Invest Some Assets in Bitcoin

Stablecoin issuer's attorney David Miller said it at the Supreme Court of the State of New York
22 May 2019   89

According to court documents received by The Block, Tether invested part of Bitcoin and other assets, including cash and cash equivalents.

At the end of April, the New York Attorney General’s Office charged Bitfinex with the fact that, having suffered a loss of $ 850 million, it concealed this fact, using the funds of its affiliated company Stablecoin Tether to cover the damage.

Shortly before this, Tether quietly updated the USDT tokens security policy. According to the updated edition, the company’s stablecoins can be provided with reserves included "traditional currency and cash equivalents", as well as, “other assets and receivables from loans made by Tether to third parties.” Also, as reported, the statement used to read: “Every tether is always backed 1-to-1, by traditional currency held in our reserves.”

Prior to the April 24th order … Tether actually did invest in instruments beyond cash and cash equivalents, including bitcoin, they bought bitcoin.
 

David Miller

Attorney, Bitfinex

Also during the hearing, Miller complained that the Attorney General of New York restricts Tether in investment activities.

In turn, the New York Supreme Court Judge Joel M. Cohen questioned the logic of the company, finding a contradiction in investing stablecoins in high-volatile assets, like Bitcoin.

Tether sounded to me like sort of the calm in the storm of cryptocurrency trading. And so if Tether is backed by bitcoin, how is that consistent? If some of your assets are in a volatile currency that Tether is supposed to somehow modulate, that seems like it’s playing into what they are saying.
 

Joel M. Cohen

Judge, New York Supreme Court

He replied that only a small amount had been invested. Also, according to him, according to the updated Tether collateral policy, collateral is allowed not only in cash and cash equivalents, but also in other assets.

The New York State Supreme Court upheld injunction on the use of Tether Limited’s reserves for the investment activities of other companies, in particular the Bitfinex cryptocurrency exchange.

Also, Bitfinex cannot use Tether assets for lending or for other needs, if this is not required by normal business practices. In addition, Tether is forbidden to provide funds from its reserves to employees, unless it is a question of salaries and standard payments.

At the same time, the ruling states that Tether can invest its reserves in the ordinary course of business. The company had already stated at the previous court session that it had used its reserves for investment purposes, but it was not known what investments we were talking about.