Noble Bank Looking for Buyer After Losing Bitfinex and Tether as Clients: Report

  • Puerto Rico's Noble Bank is reportedly looking for a buyer after losing most of its clients, including Bitfinex and Tether.
  • The financial institution could be sold for $5 to $10 million.

Noble Bank International, a leading Puerto Rican financial services firm whose clients have included the controversial cryptocurrency exchange Bitfinex and USDT issuer Tether, is reportedly looking for a buyer.

According to a report published by Bloomberg, the bank lost most of its customers including Bitfinex and Tether, and is now no longer profitable. The report cites anonymous sources, that claim the bank can sell for a price between $5 million and $10 million, based on the value of its Puerto Rican license to operate as an international financial entity.

Noble Bank became known in the cryptocurrency space earlier this year, after it was revealed it was working with Bitfinex and Tether, two organizations that share the same management and had been dumped by Wells Fargo last year.

Tether Controversy

Both cryptocurrency businesses have, in December of last year, been subpoenaed by the US Commodity Futures Trading Commission (CFTC), as the regulator is looking into whether Tether indeed has $2.7 billion to back up its USDT in circulation.

As CryptoGlobe covered, some critics claim it doesn’t, and that new USDT tokens are issued out of thin air to manipulate bitcoin’s price. A study conducted by University of Texas professor John Griffin has suggested the tokens were used to pump BTC.

An analysis published by Bloomberg in July of this year highlighted what appeared to be unusual trading patterns in the stablecoin on the Kraken cryptocurrency exchange. The exchange fought back against the analysis’ findings.

In an attempt to answer the controversy surrounding it, Tether released an analysis of its bank accounts made by the law firm of a former FBI director in June. While the report claimed it had the adequate dollar reserves, it wasn’t a proper public audit. This saw critics press the issue and use the analysis to further claim Bitfinex and Tether are fraudulently pumping BTC.

Curiously, a researcher from the University of Queensland Business School found there was no evidence pointing to Tether issuances leading to BTC price rises. Nevertheless, even Noble itself faced an audit from Puerto Rico’s main bank regulator last year. The audit, according to Bloomberg’s sources, raised concerns.

Noble Bank’s Situation

Per Bloomberg, Puerto Rico has seen a surge of cash related to cryptocurrencies, as by the end of last year international financial entities held cash and equivalents worth up to $3.3 billion, up from $191 million a year earlier.

As of June 30 of this year, the total dropped to $2.6 billion. Noble , on its website, claims to have used Bank of New York Mellon as its custodian, although BNY Mellon no longer has a business relationship with Noble.

The news outlet further points out Noble, as an international financial entity, must report suspicious activity and help US government agencies prevent money laundering, although accounts tied to “non-Americans can remain anonymous if the assets are held through offshore companies or trusts.” Bitfinex itself may be shielded, as its registered on the British Virgin Islands.

Top-Tier Crypto Exchanges' Volumes Climb Back to One-Third of Total Market Share

The aggregate trading volume of top-tier cryptocurrency exchanges has increased by 61.2% during the month of January, while the volume of lower-tier crypto exchanges increased 46.4%.

According to CryptoCompare’s January 2020 Exchange Review, the trading volume of top-tier crypto exchanges – those rated AA-B according to its Exchange Benchmark – climbed last month to represent 29.3% of the total trading volume in the space.

The rise is significant as in December, the cryptoasset data provider’s report showed top-tier cryptocurrency exchanges were seeing their trading volumes drop as they lost market share to lower-tier crypto exchanges, those rated C-F. At the time, they represented 26.4% of the cryptocurrency market’s total trading volume.

top tier trading volumesSource: CryptoCompare Exchange Review

The report further found that exchanges that charge taker fees represented 76% of the total volume last month, while those that implement the controversial trans-fee mining (TFM) model represented 22%.

It also found that regulated bitcoin derivatives are still dominated by the CME, whose total trading volumes went up 145.6% since December. Grayscale’s Bitcoin Trust product (GBTC) saw its total trading volume rise 131% since December.

As for derivatives trading on cryptocurrency exchanges, in January OKEx represented the majority of daily derivatives volumes, trading $4.96 billion per day and capturing 31.1% of the total market share. Huobi traded $4.29 billion a day for 26.9% of it, while BitMEX traded $3.13 billion for 19.6%.

Pure crypto-to-crypto exchanges notably represented 75.4% of the market’s trading volume, in a similar proportion to the last two months. The stablecoin space, per the report, is still dominated by Tether’s USDT, as it still represents 94% of the total Bitcoin trading volume into the top four stablecoins.

Decentralized Exchanges Lose Trading Volume

CryptoCompare’s report also addresses decentralized cryptocurrency exchanges, noting IDEX was the largest one in January. It traded a total of $10 million as its trading volume went up 25.4%, and it was followed by Switcheo and Bitsquare. While these platforms’ volumes went up, DEXs as a whole have been losing volume.

dex CHARTSource: CryptoCompare Exchange Review

According to the report they have diminished 88% since early 2019 to now represent a small fraction of the global spot exchange volume. In January, decentralized trading platform traded $17.8 million in total, representing 0.003% of the market. In January 2019, for comparison, they traded $148 million.

Featured image via Unsplash.