Business 12 October 2018

Ed Drake

Bitfinex pulls fiat deposits amid latest crypto price freefall

Cryptocurrency exchange Bitfinex has suspended fiat deposits, apparently on a temporary basis, amid the latest significant sell-off in the BTC markets.

The exchange, which operates from Hong Kong, was reported to have pulled the plug on wire deposits in GBP, USD, EUR and JPY, according to The Block. Unverified social media posts from customers at Bitfinex noted the situation is expected to be resolved within a week.

The suspension raises further questions about goings on at the exchange, after it was suggested Bitfinex may have been holding funds in Puerto Rico’s struggling Noble Bank. It was subsequently revealed that the firm had reached a banking relationship with HSBC.

However, it has since been reported that HSBC may not have been aware it was handling banking for Bitfinex, which had been operating through a subsidiary. This has led some analysts to consider whether the withdrawal of deposit services came as a result of this relationship being pulled by the bank.

On Thursday, BTC was trading at a premium on Bitfinex over other exchanges, a factor some have attributed to the ongoing uncertainty swirling around the exchange. The latest developments come after weeks of rumours around the financial health of the exchange, with critics pointing to the exchange’s ties to struggling stablecoin Tether (USDT).

In a post published by the exchange this week, they rubbished the claims about their financial health, saying, “How any rational party can claim insolvency when the opposite is there for all to see is interesting and, once again, perhaps indicative of a targeted campaign based on nothing but fiction.”

According to Bitfinex, “Complications continue to exist for us in the domain of fiat transactions, as they do for most cryptocurrency-related organisations. However, we continue to do our utmost to minimise any waiting times associated with fiat deposits and withdrawals.”

Questions are now being asked of the sustainability of withdrawals on the platform, which have to date been unaffected by these events.

However, with this perhaps only the latest chapter in Bitfinex’s now farcical search for a banking partner, it remains to be seen whether the Hong Kong-operated exchange can continue to carry the confidence of its customers.

Note: Tokens on the Bitcoin Core (SegWit) chain are referenced as BTC coins; tokens on the Bitcoin Cash ABC chain are referenced as BCH, BCH-ABC or BAB coins.

Bitcoin Satoshi Vision (BSV) is today the only Bitcoin project that follows the original Satoshi Nakamoto whitepaper, and that follows the original Satoshi protocol and design. BSV is the only public blockchain that maintains the original vision for Bitcoin and will massively scale to become the world’s new money and enterprise blockchain.

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