Peurto Rico-Based Noble Bank Looks For Buyers After Losing Tether And Bitfinex As Clients

Noble Bank International, a financial service firm based in Puerto Rico is looking for a new buyer after losing Tether and Bitfinex as clients, according to a report by Bloomberg.

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Noble Bank International, a financial service firm based in Puerto Rico is looking for a new buyer after losing Tether and Bitfinex as clients, according to a report by Bloomberg.

Bank loses customers

The report revealed that the bank has lost most of its customers, notably popular stablecoin provider Tether and cryptocurrency exchange Bitfinex. A source close to the situation revealed that the bank is no longer making profits.

This has prompted the owners to look for new buyers, with the asking price of around $5-$10 million. The selling price is based almost entirely on the value of the bank’s Puerto Rican license to operate as an international financial entity.

The bank had avoided fractional reserve banking, a move that was crucial in Tether’s claims that its stablecoins had full backing.

The source did not disclose who Tether and Bitfinex are looking to bank with at the moment.

The report, however, stated that an inspection of Noble last year by Puerto Rican regulators led to some regulatory concerns.

If the source is to be believed, Tether doesn’t have access to legal banking, as Wells Fargo stopped working with the cryptocurrency project a few months ago.

In another blow to Noble, the source told Bloomberg that the custodian bank of Noble, BNY Mellon is not interested in fulfilling its claimed role.

Tether moving funds to other banks

The research wing of the Hong Kong trading platform BitMEX followed up on the Bloomberg report and confirmed that Tether is indeed moving its funds out of Noble and into other banks outside of Puerto Rico.

In a report yesterday, BitMEX Research revealed that they have also received information from insiders in Tether that Tether funds have been diversified into other banks.

A banking crisis for Tether could affect the cryptocurrency tremendously as over 21% of total volumes for all coins and tokens are made up of USDT pairings.

Tether has been hit by several controversies over the past few months. Earlier this year, a research paper from the University of Texas claims that Tether was used to artificially inflate the price of Bitcoin during a sharp decline in its price.

In December 2017 the CFTC subpoenaed Bitfinex and Tether as they attempted to confirm if Tether had more than the $2 billion it claims to have in its bank accounts.

A paper published recently by Dr. Wang Chun Wei, a lecturer at the business school of Australia’s University of Queensland revealed that the issuance of Tether doesn’t have much significance to the price of Bitcoin.

Puerto Rico gets more cash from crypto businesses

Puerto Rico did witness an increase in cash from crypto-related ventures. Towards the end of last year, international financial entities operating in the region were holding $3.3 billion. This is a massive rise compared to the $191 million recorded the previous year.

The amount had dropped to $2.6 billion but sources close to the firm stated that Noble still holds most of these funds.

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