Tether-Backed Orionx Shuts Down After $7M Custody Gap | Crypto ETF News
Crypto ETF news: Tether-Backed Orionx Shuts Down After $7M Custody Gap. This update explains what changed, why it matters for institutional adoption, market flows, and investor sentiment, and what the crypto market should watch next.
Institutional And ETF Update
Orionx, a Chilean crypto exchange backed by USDt stablecoin issuer Tether, is shutting down after uncovering a multimillion-dollar issue linked to asset custody.The exchange said it began a permanent closure process after a forensic audit found more than $7 million in custodial assets had moved to wallets it did not manage, according to a company announcement shared on X on Thursday.“Our sole priority now is to return as much of our clients’ assets as possible,” Orionx said, adding that withdrawals are temporarily suspended.The closure comes just 15 months after Tether led Orionx’s Series A as part of its push to expand digital asset adoption in Latin America.Orionx leaves timing of $7 million transfers unclearOrionx’s post did not specify when the more than $7 million in transfers occurred or how the discrepancy was initially uncovered.As part of its efforts to comply with Chile’s Fintech Law, Orionx conducted a review of its operations in 2025 and brought in financial professionals, according to the major Chilean newspaper La Tercera, citing the company’s criminal complaint.On Aug. 27, chief operating officer Thomas Mac Millan detected a “significant mismatch” between balances recorded in Orionx’s systems and assets actually held in custody, according to the complaint.Related: BitMEX co-founder contributed 75% of Reform UK’s donations in Q2 2026An internal review followed, and Orionx later commissioned an external forensic audit that compared its records with data verifiable onchain. The audit found that balances recorded in Orionx’s systems exceeded the assets held at its custody addresses for Bitcoin (BTC), Ether (ETH), XRP and Polygon (POL).The criminal complaint reportedly alleges that assets were transferred out of Orionx’s custody between 2018 and 2021, including to accounts on other crypto platforms.Orionx accuses co-founders, who deny wrongdoingOrionx said it filed a criminal complaint on Wednesday against former executives Roberto Zibert and Joaquín Díaz, both co-founders who allegedly had access to the company’s crypto custody systems.The complaint alleges that an account associated with Díaz received more than $1.5 million across 14 transfers, while another wallet allegedly received 187 Ether, more than 4.1 million USDt (USDT) and 200,000 USDC from Orionx, La Tercera reported.Former executive and Orionx co-founder Roberto Zibert. Source: LinkedInZibert and Díaz denied the allegations, saying they never acted against customers’ interests and that the cause of Orionx’s asset shortfall remains unclear.Tether backed Orionx in 2025Founded in Chile in 2017, Orionx grew from a retail crypto exchange into a platform offering crypto payment and financial services in Chile, Peru, Colombia and Mexico.Tether invested in Orionx in June 2025, exclusively leading the exchange’s Series A funding round, according to an archived version of Tether’s announcement. The announcement is no longer available on Tether’s website.Cointelegraph contacted Tether and Orionx for comment but had not received a response by publication.Magazine: Tether sued over $42M in frozen coins, 6,600 students get crypto loans: Asia Express
Why This ETF News Matters
First, this development may affect institutional demand, exchange flows, market liquidity, and broader investor confidence. In addition, it may influence custody trends, fund positioning, and future crypto product approvals. As a result, traders and investors should watch the next moves closely.
What To Watch Next
Watch for filing updates, approval decisions, inflow and outflow data, custody changes, and asset manager commentary. In particular, any new developments involving BlackRock, Grayscale, Fidelity, or major spot ETF products could directly affect the broader crypto market.
