Bitfinex CFO: Bitfinex needs "a few weeks" to unfreeze funds

Bitfinex CFO: Bitfinex needs "a few weeks" to unfreeze funds

Translator: Play the coin family ElaineHu

Two shareholders at Bitfinex said they were not worried about the allegation that the Attorney General of New York had lost $850 million in customer and company funds on the cryptocurrency exchange.

Bitfinex shareholder Zhao Dong said in an interview with CoinDesk last Friday that he still "supports" Bitfinex and Tether. In the past, Zhao Dong tried many times to guarantee to the field of encryption that the exchange was solvent and that the stable currency was over-regulated.

Bitfinex Chief Financial Officer Giancarlo Devasini personally assured Zhao that this is only a temporary situation. In fact, Devasini told him that the exchange “will take a few weeks to thaw the funds”.

Zhao said, "These funds exist in several banks in Poland, the United States and Portugal. I am not very sure about this, but I know this is the case."

Although the Office of the Attorney General of New York stated that the lost funds belonged to Bitfinex's corporate accounts and customers, Zhao said that the funds were entirely customers, he pointed out:

"The information I have at present is that there is no loss, but these funds belong to the customer. If the US government confiscates these funds, they should know that these funds are not Bitfinex or Tether, but the customer's money."

"I believe in them"

Just the day before Zhao made the above remarks, the New York Attorney General issued a court order asking the exchange to save and hand over all the documents related to the matter, and to outline how Bitfinex borrowed funds from its sister company Tether. Documents (both companies are operated by iFinex).

According to NYAG's findings, Bitfinex was unable to secure $850 million from Panama-based Crypto Capital and borrowed $700 million from Tether's foreign exchange reserves to fill the gap. The news sparked a sell-off in the broader encryption market and a large amount of money turned to buy more reliable stable currencies in the next few hours, indicating investors are concerned about the two long-standing controversial companies.

However, when asked if he was worried about Bitfinex's allegation of concealing $850 million in losses, Zhao said he was not worried.

He used his six-year trading experience on the exchange as a reason to remain confident. "They (before the disaster) did a good job, so I believe them," said Zhao, referring to the hacking in 2016 and Wells Fargo's freezing of its funds in 2017.

Tether vs. Bank

Zhao also believes that Tether's model is safer than some reserve banks.

"Tell me, which bank can guarantee 100% reserves? Even Tether has not reached the full reserve reserve, (but) it is much better than other banks," he said. He pointed out that "most banks only have a reserve of 2% to 3%. In the case of a loss of $800 million, they may only be able to afford 70%."

When asked about Tether's reserves, Zhao added that he believes the company has 100% financial support, "but even if they don't, they are much better than banks."

It is worth noting that banks in the United States have insurance from the Federal Deposit Insurance Corporation. Once a bank goes bankrupt, the amount of insurance for each customer can be up to $250,000. According to the International Association of Deposit Insurance, similar arrangements exist in more than 140 other countries.

"They didn't run the road"

Zhao is not alone. Another shareholder, Tian Jia, told CoinDesk last Friday that he still supports Bitfinex, and all the executives of the company have expressed support since the news came out last Thursday night.

"They are still there, they are trying to solve the problem," he said. (CoinDesk has not received a response from Bitfinex and Tether for multiple requests for comment on this matter.)

Despite this, Tian said that he does not have any information that Bitfinex has not yet announced, such as Bitfinex said in a statement on Thursday night that it plans to unfreeze the funds. He did not know about it beforehand.

Tian concluded that:

"Because this is the customer's money, not the stolen cryptocurrency, but the legal currency. It can't be stolen. It's just frozen by the regulator, and Bitfinex is trying to thaw these assets through contact with Panama and the US. They have been In communication."