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Author Topic: Bitfinex is getting more and more suspious  (Read 2864 times)
HorseRider
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August 24, 2015, 10:46:22 AM
Last edit: August 26, 2015, 06:23:23 PM by HorseRider
 #1

I have been in the Bitcoin community since 2011 and now I smell something that is not right about Bitfinex recently. I believe it is the right time to start this post, to let the community to have a full records of the ongoing history. I also want to start this post to let the whole community watch out for this risk. People are still using Bitfinex, and the trading volume of Bitfinex is still among the largest. However, I have already find the clue of fraud, and the evidence of amateur.

This unregulated exchange is a huge risk for the Bitcoin economy. We need to let more people to know about the risk associated with this exchange, and we should let other traders know.

I am living in China and getting communicated a lot with the bitcoin community there. On 14th Aug, the COO of btc123.com, Chandler Guo, has removed bitfinex from their list of quotations.

btc123.com  remove bitfinex 4days ago!

Chandler shared a very important piece of information in a Wechat group, indicate that a China arbitrage trading team have find issues when withdrawing bitcoin from the Bitfinex exchange. Soon, I myself get confirmed from the leader of the team, Mr. Zhao, confirmed it. He said that he had to "rummaged around" the whole Bitfinex contact list and trying every way to have a respond, and then got the Bitcoin withdraw done. The bitfinex give him an excuse of something with the evil U.S. government seizing their fund. This has never happened before. Mr Zhao showed us the email:



Evil U.S. government are seizing our fund. The withdraw is slow. Signs of market manipulation. Doesn't it looks pretty familiar? When we find signs of similar problems with mtgox, mtgox is not shutting down immediately. The whole situation of mtgox evolved in about 10 months time.

Now it is the time to be very cautious for us to look into what is happening with Bitfinex. And for those who are not trading there, I believe you will have a good time to look at the show in the next months.

Bitfinex is freezing (again)
https://www.reddit.com/r/BitcoinMarkets/comments/3i62jz/bitfinex_is_freezing/

Bitfinex errors or market manipulation?
https://www.reddit.com/r/BitcoinMarkets/comments/3hpa5e/bitfinex_errors_or_market_manipulation/

Role of market makers in Bitfinex flash crash
https://www.reddit.com/r/BitcoinMarkets/comments/3hsges/role_of_market_makers_in_bitfinex_flash_crash/

Critical issues with Bitfinex trading engine
https://www.reddit.com/r/BitcoinMarkets/comments/3hnk8g/critical_issues_with_bitfinex_trading_engine/

Bitfinex CEO recording after 18/08/2015 flash crash

It's August you know. (ah that explains it)
open positions at 170 not filled?
I don't know about that.
Shit like this happens every 2 months
We're still trying to make it work.
even if you try via API?
Uh Uh. No. Look I understand guys. No.1 rule of trading. You press the bottom once it doesn't you don't press it again. OKAY?"
I believe it's a bug we fixed a long time ago. Maybe."


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August 24, 2015, 11:48:37 AM
 #2

I bet your "Chinese arbitrage trading team" must be moving large amount of fiat, particularly USD across different banking systems?
You cannot stop the "evil US government" from studying you when you are moving large amount of their currency around the world.
I never have any issues withdrawing USD or BTC from Bitfinex
HorseRider
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August 24, 2015, 01:12:30 PM
 #3

I bet your "Chinese arbitrage trading team" must be moving large amount of fiat, particularly USD across different banking systems?
You cannot stop the "evil US government" from studying you when you are moving large amount of their currency around the world.
I never have any issues withdrawing USD or BTC from Bitfinex

No, he was withdrawing the Bitcoin.

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August 24, 2015, 01:20:13 PM
 #4

I have been able to withdraw 40+ BTC multiple times without any issues. They were always processed almost immediately with a transaction being broadcast prior to the next block being found. The only delays I have ever experienced with them was during the stress tests however I believe that was due to the unavailability of confirmed unspent inputs.

Their number and severity of problems is small IMO

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August 26, 2015, 06:14:56 PM
 #5

Bitfinex - Pretty sure we are dealing with amateurs here (self.Bitcoin)

The title says it all - consistantly over the past couple weeks we have experienced issues such as:
Ghost orders (placing margin shorts and longs when you never did)
Closing orders on their own
Not closing active positions
Unable to cancel orders
Not filling buy or sell orders (on the way up or down when under load)
Doubling margin when you don't have the required margin to cover it (WTF???)
What is the excuse? Don't hit the button more than once. Well I never did and it appears they put in a fix that notifies you when you hit it multiple times. Who cares. That should of been FIXED. Regardless - this exchange is considered mature and "world's largest". Then why the hell would they send service outage notices ONLY on twitter?
They don't have a problem sending you emails when you login or when you are getting margin called but they cannot send you an email when service has been interrupted or resumed? This is a complete joke. Everybody doesn't have twitter and further more - where is the incident management process in place? THERE IS NONE!
TLDR; we are dealing with amateurs. They clearly lack the Technology talent in regards to programmers and infrastructure staff to make things scalable. Sure they made some behind the scenes security posture stuff. GREAT! That is to be expected.
I will be moving my coins and going to another exchange. I suggest you do as well before things get real bad.

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August 26, 2015, 06:17:01 PM
 #6

Below is written by the user on Reddit whose ID is "elux". When I submit this, it has get 26 up votes already.

Quote
Bitfinex is not a financial services business run by competent, experienced professionals.
Bitfinex is not built from the ground up on sound principles of engineering.
Bitfinex was copied from the leaked bitcoinica codebase, a Ruby-on-Rails app written by then 16 year old Ryan Zhou.
Saying "they reverse-engineered it" would be overly charitable.
Bitfinex was released within some weeks of the Bitcoinica source code leak.
The codebase was copied from a defunct, thrice robbed company.
That code is not capable of keeping the database consistent at peak loads.
That code is not scalable. That code was not, and is not correct.
Not correct according to specification. (Which doesn't exist.)
Not correct according to expectation. (The business logic of the exchange is broken.)
This becomes evident as the load on their server approaches capacity.
Everything goes to shit. Time and time again.
Their database stuff seems limited to concurrent reads, but single threaded writes.
It is a product of inspired design, not engineering.
It is very far from being remotely acceptable for a financial exchange.
But at least they have been making money since day one.
(Because they had essentially no development costs, starting out.)
There is a good story here, waiting to be written by some investigative journalist.
Perhaps we will have to wait for some catastrophe before that happens.

Quote
Bitfinex was copied from the leaked bitcoinica codebase, a Ruby-on-Rails app written by then 16 year old Ryan Zhou.
This alone is a reason not to use it, I still have domains stranded in that gobshites domain registrar (nameterrific) that was first to accept bitcoin
I hear he is now running coinjar in Australia, pitty the fools who use that now

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August 26, 2015, 06:24:35 PM
 #7

I have been able to withdraw 40+ BTC multiple times without any issues. They were always processed almost immediately with a transaction being broadcast prior to the next block being found. The only delays I have ever experienced with them was during the stress tests however I believe that was due to the unavailability of confirmed unspent inputs.

Their number and severity of problems is small IMO

There is similar long time of history, when everything with mtgox is right. However, from some time the mtgox started to show very risky signals, and less than one year later, it collapsed.

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August 26, 2015, 08:55:07 PM
 #8

I have been able to withdraw 40+ BTC multiple times without any issues. They were always processed almost immediately with a transaction being broadcast prior to the next block being found. The only delays I have ever experienced with them was during the stress tests however I believe that was due to the unavailability of confirmed unspent inputs.

Their number and severity of problems is small IMO

There is similar long time of history, when everything with mtgox is right. However, from some time the mtgox started to show very risky signals, and less than one year later, it collapsed.


When the very risk signals start to appear I will start to worry and sell.

Until now, I don't think there is enough evidence to justify panic or fear about another gox event
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August 31, 2015, 02:16:12 PM
 #9

Aug 31st, 2015.

Bitfinex is offline again.



Bitfinex.com offline again, orders don't seem to be getting accepted through UI. (self.Bitcoin)
submitted 1小時前 by bell2366
It's crazy you press button and absolutely nothing happens! Any decent programmer could manage a 'Server not responding' type message.

Rumor goes that in webchat groups,

Quote
Bitfinex's bank account got serious trouble, as they are suspected are related with money laundry. They were asked to corporate with the investigation from government.
Their cold wallet now has only 90k bitcoin left, only half as short time ago.


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August 31, 2015, 02:17:38 PM
 #10

next in line: BTER. they're withholding withdrawals for at least 2 altcoins I know of for more than 12 weeks now. I guess they collapsed already and are illiquid

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August 31, 2015, 02:21:35 PM
 #11

What is their cold wallet address?

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August 31, 2015, 05:24:05 PM
 #12

They're offering to give me back 2344.5 of 6537.61  USD lost from a good faith effort to close a position. I am guilty of hitting close more than once, but I refreshed before doing so and the info displayed in the browser obviously did not indicate that previous market orders had gone through (otherwise their engine would have bounced the new orders because they're not supposed to stack). I got caught in a loop of confusion where i was a short then a long etc, but since their web server was feeding me wrong info during the crash I feel wronged by bfx. I do not know how to respond to the offer.
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August 31, 2015, 05:57:15 PM
 #13

They're offering to give me back 2344.5 of 6537.61  USD lost from a good faith effort to close a position. I am guilty of hitting close more than once, but I refreshed before doing so and the info displayed in the browser obviously did not indicate that previous market orders had gone through (otherwise their engine would have bounced the new orders because they're not supposed to stack). I got caught in a loop of confusion where i was a short then a long etc, but since their web server was feeding me wrong info during the crash I feel wronged by bfx. I do not know how to respond to the offer.

Sorry to hear that, I know of many other people who had problems with hitting buttons multiple times  Lips sealed
However I would take their offer. It obviously sucks but that is the most you will get from them as a
gesture of goodwill.
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September 01, 2015, 02:01:08 AM
 #14

They're offering to give me back 2344.5 of 6537.61  USD lost from a good faith effort to close a position. I am guilty of hitting close more than once, but I refreshed before doing so and the info displayed in the browser obviously did not indicate that previous market orders had gone through (otherwise their engine would have bounced the new orders because they're not supposed to stack). I got caught in a loop of confusion where i was a short then a long etc, but since their web server was feeding me wrong info during the crash I feel wronged by bfx. I do not know how to respond to the offer.

The button bug could very likely be intentionally. We can all image who is getting benefit from the 6537.61-2344.5= 4193.11, the unregulated Bitfinex exchange.

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September 01, 2015, 05:26:37 AM
Last edit: September 01, 2015, 01:44:03 PM by jdebunt
 #15

Derp, my brainfart, it was a different exchange. Apolog!es
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September 01, 2015, 05:28:49 AM
 #16

so long story short, anyone dealing with bitfinex is screwed entirely.

i dont see them doing any form of business any time soon, if they have their thing frozen.
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September 01, 2015, 05:42:34 AM
 #17

well now Bitfinex halted deposits for US customers, things are only getting worse it seems.
Huh Do you have a source on this? A quick google search on this reveals nothing, as does looking at their twitter page, and website/announcement page.

It appears that there is a lot of negative information about bitfinex on this (and other) threads from a number of users, however very little of it is being backed up by publicly available information....

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September 01, 2015, 01:08:37 PM
 #18

Well this is the last freaking thing that we need at the moment. Like we don't have enough on our plate, the whole Bitcoin community. I will withdraw all my funds from Bitfinex as we speak. I mean 1 thing adds up to another and honestly, this has become a bit to much. Something fishy is going on.

So everyone should just withdraw while they still can, and let's hope nothing happens at all. Last thing we need is another earthquake, now while the Bitcoin is very vulnerable.
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September 01, 2015, 01:44:26 PM
 #19

Huh Do you have a source on this? A quick google search on this reveals nothing, as does looking at their twitter page, and website/announcement page.

It appears that there is a lot of negative information about bitfinex on this (and other) threads from a number of users, however very little of it is being backed up by publicly available information....

Derp, my brainfart, it was a different exchange. Apolog!es!
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September 01, 2015, 03:30:06 PM
 #20


Posting mostly just to monitoring this thread since it seems active and with decent info.

For my part, I did not even consider using Bitfinex due in part to the involvement of a guy who went by the name ~unclescrooge here.  He seemed to me  like the kind of guy who would get involved in a scam.

I pulled what money I had in MtGox out in time.  (Sorta.  I've still got a $5000 claim for a fiat wire they never sent me.)

I figure that what Bitstamp did was a little internal scam to save on taxes.  They got on my shit-list when they snuck in a KYC without letting people remove their funds first.  Glad to see that they have not stolen peoples money in bulk.  Yet.

Since the 4-figure valuations I've not been an active participant.  I used Coinbase because I could, and because I figure I can sue them if the rob me.

Perhaps it's time to think up a name permutation for Bitfinex:

 - Tradehill --> Tradehole

 - Mt Gox -->  Mt Lox?  Mt. Sux?

 - Bitcoinica --> Bitgonica

 - Bitstamp --> Bitstump

 - Bitfinex --> Bitfin-ex


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