Bitfinex is dropping their US customers

[alyssa85]

Seems like that they are scared by the fact that BTC-e basically got brutally taken down by the US government, and they want to vaoid the US government as much as they can because they know that even with their KYC standards it might not be enough.

And plus as they said the effort and money put into handling US side of things is just too large.

Most of Bitfinex's users aren't even US citizens, meaning that discontinuing US users will lessen their profit, just not by a very large margin at all.

Just use some other exchange if you're in US and still want to trade. Most of them are still open for US, but some ban specific states.

Bitfinex lost it's ability to move dollars in April this year. And zero hedge wrote the following article about them in May:

http://www.zerohedge.com/news/2017-05-03/worlds-largest-bitcoin-exchange-headed-mt-gox-style-collapse

Could Bitfinex, the world's largest, Hong-Kong based cryptocurrency exchange, be headed for a Mt. Gox-style collapse? It's starting to look that way.

When Mt. Gox first halted customer withdrawals in February 2014, it waited more than two weeks to admit the truth to its customers: that hackers had stolen more than $450 million of their assets, leaving the exchange bankrupt and them holding the bag.  That hack effectively crippled the entire digital currency ecosystem, ushering in a two-year bear market that at one point carried the bitcoin price below $200, from what was then a record high north of $1,200 reached in November 2013.

So when another exchange engages in similarly shady behavior - withholding critical information about customer funds, or failing to produce audited financials despite promising to do so - it should prompt crypto traders to ask themselves why, with dozens, if not hundreds, of cryptocurrency exchanges operating around the world, they're choosing to do business with this one.

The writing has been on the wall for some time.

If people have coins there, start moving them now. Don't wait 90 days.

[giveen]

That's a good decision we now see ico also not allowing us residents to fund their project the problem is us has a lot of attitude they think they are the best and have perfect regulations well we can now see the crypto word gives no f**ks about us let this be a lesson for their regulations i hope more exchanges start boycotting because of all these rules i had decided to move of us long ago. Plus bitfinex told they didn't get much revenue from us customers so it's not a big deal at all.

[aoihs00]

Why to even care for this as we have more than enough options to trade and invest money in. They have mentioned that they will be serving corporate customers as they have normalised the regulations for those customers of course this is in greed that corporate customers will invest big amounts of money than normal investors like us. Anyway, I would drop it too as I have more options to think on and can keep doing what I was doing with bitfinex. Not a big deal though.

[MAbtc]

What is stopping any US citizen from simply opening up a new BFX account?
It is not necessary to verify your account at all if you deposit and withdraw only
in cryptos.

I see the reasoning behind their decision, but I think practically you can
still continue to use their exchange, if you want to do it.

Exactly. Unverified US users (a large percentage of their userbase) may not even need to do anything if they already indicated last year that they are not US residents (even if their IP address suggested they were). If anything, US users will just start using VPNs if Bitfinex introduces IP restrictions.

I still don't think this will shield them from US government action given that they've been processing deposits and withdrawals for years to US residents. It's clearly a CYA move, but I don't think it is necessarily good enough...

[sylance]

I have to say that as an American I'm getting increasingly frustrated with how our government is pushing back on crypto.  I see other countries looking for ways to work with this new industry and all I see from our government is ways to regulate or flat out ban it.  I'm going to head over to petition.whitehouse.gov and create a petition to back off of crypto.  I know it wont do anything but we have to start somewhere.

[leopard2]

This is because US government considers US citizens their property, it is called serfdom

https://en.wikipedia.org/wiki/Serfdom

They also think they own the planet....

Too many Americans are idiots so they cannot see this and vote for Ron Paul. 

[sylance]

This is because US government considers US citizens their property, it is called serfdom

https://en.wikipedia.org/wiki/Serfdom

They also think they own the planet....

Too many Americans are idiots so they cannot see this and vote for Ron Paul. 

Completely agree!!!!  I don't think America was ready for Ron Paul, but I agree that his vision is where we need to go.  This was the most depressing election every... I had to do a write in and wrote on Ran Paul.

[figmentofmyass]

I have to say that as an American I'm getting increasingly frustrated with how our government is pushing back on crypto.  I see other countries looking for ways to work with this new industry and all I see from our government is ways to regulate or flat out ban it.  I'm going to head over to petition.whitehouse.gov and create a petition to back off of crypto.  I know it wont do anything but we have to start somewhere.

i don't think they are trying to ban it, but yes, they want to regulate it. and when the US wants to regulate something, it means punishing unregulated entities. i'm sure this is why bitstamp and coinbase started obtaining licensing and implementing harsh KYC measures starting years ago. they were smart enough to see this coming and are likely safe from this mess. i'd be worried about keeping funds on bitfinex after what's happened at btc-e (even if you weren't already worried given the hack last year).

[illinest]

Well, I do see this as a bad think neither for US people not for the rest of us. If a service acts like that as is afraid of being taken down, this usually means they have something to hide or they re involved in some illegal shit. Why would I use that kind of service? Crypto s NOT about scamming people and doing market manipulation.

So I d say, fuck you Bitfinex. I m from Europe and your ban does not apply to me (yet) but you will not see a single satoshi from me.

I wouldn't jump into conclusions that fast. Don't forget that the US government can pull off random reasons just to shut down businesses, not to mention we're talking about cryptocurrencies here. Which they might see as competition or a threat to their fiat. Also, maybe they're gonna disallow US citizens because of the same reason why ICOs are not allowed in the US?

They are trying to saying that "compliance costs" of verifying US users and complying with AML/KYC laws is too great. The real cost that they avoided for years was registering as an MSB in all US states. After what's happened to BTC-e, they are scared, and this is the first move to cover their ass.

[alyssa85]

I have to say that as an American I'm getting increasingly frustrated with how our government is pushing back on crypto.  I see other countries looking for ways to work with this new industry and all I see from our government is ways to regulate or flat out ban it.  I'm going to head over to petition.whitehouse.gov and create a petition to back off of crypto.  I know it wont do anything but we have to start somewhere.

In this particular instance, don't be upset, your govt may have saved you from a MtGox scenario. There have been a number of flags over bitfinex for some time - their mysterious hack last year, the high withdrawal fees etc.

Take your coins out and be glad you won't be using them again!

[btcney]

https://www.bitfinex.com/posts/216

Service Changes for U.S. Customers

Bitfinex is making changes to the services we provide to U.S. individuals. These changes impact the verification process and trading of certain digital tokens for U.S. customers. Some changes are effective immediately, and others will be gradually implemented in the coming weeks.

Suspension of U.S. Individual Verification Requests

We regret to announce that, effective immediately, we will no longer be accepting verification requests for U.S. individuals.

We have for some time considered pulling away from the retail marketplace in the U.S., and now with a current backlog of verification requests and ongoing difficulties in providing USD deposit and withdrawals for U.S. individuals, we feel that the time has come to begin disengaging from U.S. retail customers.

Several factors have gone into this decision:

    While we have been able to normalize banking for some corporate customers and individuals in certain jurisdictions, compliant banking solutions for U.S. individuals remain elusive. We have been slowly and selectively inviting users in particular jurisdictions who meet set criteria to start using banking channels that have come online. This process is ongoing.
    A surprisingly small percentage of our revenues come from verified U.S. individual accounts while a dramatically outsized portion of our resources goes into servicing the needs of U.S. individuals, including support, legal and regulatory.
    We anticipate the regulatory landscape to become even more challenging in the future.
    Bitfinex is not based in the United States. Exchanges based in the U.S. are better positioned to properly service retail U.S. customers.

We are thankful to all of our loyal U.S. customers that have consistently traded with us but, unfortunately, we have an obligation to our whole customer base and to our shareholders to make rational resource allocation decisions.

Furthermore, over the next 90 days, we will be discontinuing services to our existing U.S. individual customers. We will be communicating further with affected users on timing and specifics. Our intention is to reduce disruption as much as possible for our U.S. customers.

We will continue to take advice and implement further changes as circumstances warrant.

Restrictions on U.S. Persons Trading Certain Digital Tokens

Pursuant to the recent report of investigation issued by the U.S. Securities and Exchange Commission, Bitfinex is taking the proactive step of barring U.S. customers from trading certain digital tokens that may be deemed securities in the eyes of the SEC.

The restriction will generally apply to ERC20 tokens issued through "ICOs" and will go into effect at noon UTC on Wednesday, August 16, 2017. No trading of these tokens will be allowed for U.S. customers. At the time of this post, the tokens active on Bitfinex that will be subject to this restriction are EOS (EOS) and Santiment (SAN).

Once again, we regret any inconvenience this change in policy might create, but we believe this to be a prudent measure given the regulatory uncertainty surrounding such digital assets.

They probably saw what happened with BTC-e and decided to bail out sooner rather than later.

Not sure why they would still offer unverified services for US citizens, though. Pretty sure the only things that will be discontinued from the next 90 days would be US citizens' ability to obtain a verified account, and deposit and withdraw from their site. They can still access Bitfinex without any issues, it's just that they can't deposit using USD, withdraw using USD, or trade specific tokens.

If they are going to shut down the US market then at least do it properly and block all incoming traffic.

Also, are previously verified accounts going to stay verified? Since they said that they are "no longer" accepting verifications.

[illyiller]

They probably saw what happened with BTC-e and decided to bail out sooner rather than later.

Not sure why they would still offer unverified services for US citizens, though. Pretty sure the only things that will be discontinued from the next 90 days would be US citizens' ability to obtain a verified account, and deposit and withdraw from their site. They can still access Bitfinex without any issues, it's just that they can't deposit using USD, withdraw using USD, or trade specific tokens.

If they are going to shut down the US market then at least do it properly and block all incoming traffic.

Also, are previously verified accounts going to stay verified? Since they said that they are "no longer" accepting verifications.

They said "discontinuing services to our existing U.S. individual customers" so that means all US customers by my reading. And verification does no good anyway, since they have zero ability to get bank wires to customers. I wouldn't be surprised if that's helping to push the price up; the only way to get out of Bitfinex is to buy coins...

My reading of it: Effective immediately, no verification for US users. On August 16, no trading of ERC tokens for US users. It's unclear when US users (verified or not) will be barred from trading on their exchange, presumably within 90 days of the posting.

I thought they would have blocked US traffic following the CFTC decision and the security token distribution following the hack, but all they made US people do is click a box saying they didn't reside there. That might be all they do here; maybe unverified US users will just create new accounts and say they aren't US residents. Might not even need a VPN.

[illinest]

I have to say that as an American I'm getting increasingly frustrated with how our government is pushing back on crypto.  I see other countries looking for ways to work with this new industry and all I see from our government is ways to regulate or flat out ban it.  I'm going to head over to petition.whitehouse.gov and create a petition to back off of crypto.  I know it wont do anything but we have to start somewhere.

In this particular instance, don't be upset, your govt may have saved you from a MtGox scenario. There have been a number of flags over bitfinex for some time - their mysterious hack last year, the high withdrawal fees etc.

Except they did so by making BTC-e insolvent and likely unable to relaunch to repay users. A lot of Bitfinex users were also BTC-e users (and lots of US residents on both exchanges). So, I'll continue to be upset, thank you very much.

[sylance]

I wish they'd communicate more.  I keep some coin on Bitfinex because I love the margin lending feature.  Earning passive income is very attractive, but it's so strange they communicated their discontinuation of US support and then nothing for 2-months.

[alyssa85]

yea that's all I did, clicked that box and said I'm not a us resident - are they that stupid?  finally transferred the rest of my IOTA out of there to binance - not many options for iota if you don't want hardware wallet (which I could never get working) ..  it's unfortunate our government is so evil and bitfinex are cowards. bye bye bitfinex

It isn't about stupidity exactly, it's about plausible deniability. They can point to you actively claiming you arn't American and it's on you for fibbing.

[olowshinenine]

Hi i use this platform for trading. Are they going to take my tokens if they have not been removed by November 9th?

Please let me know

[sylance]

Well, it's official.  I'm disappointed but at least I know the plan now.  We have until November 9th to remove all coins from Bitfinex; afterwards all trading, deposits, and withdrawals will be blocked.

https://www.bitfinex.com/posts/227

This message is further to our announcement of August 11, 2017, with respect to terminating our business with U.S. individual customers. As indicated in the announcement, we are terminating trading, deposits, and withdrawal functionality for U.S. individual customers by no later than November 9, 2017. U.S. customers are already barred from receiving financing from other users on Bitfinex’s peer-to-peer financing platform. This restriction will remain and, in addition, U.S. individual customers will no longer be able to provide financing on Bitfinex effective November 9, 2017.

All U.S. individual users must make arrangements to withdraw their Digital Tokens by November 9th.

U.S. individuals holding Recovery Right Tokens (RRTs), if any, which relate to the exchange of now-defunct BFX tokens to equity in iFinex Inc., may, starting on October 27, 2017, sell all of their RRTs on the exchange, if they so elect. This is an exception to the general terms of use for RRTs. U.S. individuals are not permitted to buy RRTs during this time period. All terms and conditions relating to the sale of any RRTs remain in full force and effect and are deemed to apply to the sale of any RRTs by U.S. individuals or otherwise. Any RRTs remaining in the hands of U.S. individual verified customers after the November 9th deadline may be sold through Bitfinex on an OTC basis through special arrangement with us.

[countryfree]

Good. I'm very happy with this decision. They're going the same way as Swiss banks. US customers bring too many problems. Most banks in most countries, and most financial institutions everywhere in the world, are just telling Americans to stay at home.
Sorry sir, we don't want to do business with you.
That's what you hear when you're an American abroad nowadays. If Trump would kill FATCA and the International taxation of US citizens instead of wrecking the deal with Iran, it could change.

[illyiller]

Well, it's official.  I'm disappointed but at least I know the plan now.  We have until November 9th to remove all coins from Bitfinex; afterwards all trading, deposits, and withdrawals will be blocked.

It's interesting that they actually say that withdrawals will be blocked. Usually, sites include a note about recovering funds after the deadline has passed. I expected them to say automatic withdrawals would be blocked, or something similar.

Good. I'm very happy with this decision. They're going the same way as Swiss banks. US customers bring too many problems. Most banks in most countries, and most financial institutions everywhere in the world, are just telling Americans to stay at home.
Sorry sir, we don't want to do business with you.
That's what you hear when you're an American abroad nowadays. If Trump would kill FATCA and the International taxation of US citizens instead of wrecking the deal with Iran, it could change.

That's definitely not what you hear when you're an American abroad nowadays. Maybe from a few cryptocurrency brokers/exchanges, like Bitfinex, Bitmex, Wex.nz. But in general, no. And even in the Bitcoin space, most services/exchanges welcome American business even given the legal risks of doing so because it is such a massive market. I think that Bitfinex was lying when they said that Americans represent a small portion of their business. The truth is that they are terrified that they will be taken down like BTC-e was. Shutting down business for Americans now won't prevent that.

[TravelMug]

Good. I'm very happy with this decision. They're going the same way as Swiss banks. US customers bring too many problems. Most banks in most countries, and most financial institutions everywhere in the world, are just telling Americans to stay at home.
Sorry sir, we don't want to do business with you.
That's what you hear when you're an American abroad nowadays. If Trump would kill FATCA and the International taxation of US citizens instead of wrecking the deal with Iran, it could change.

You saying that it has a political motivation behind here not wanting US citizens because they bring more harm than good?

But If I'm a US citizen, I will take this news as another slap on the face because they will lose a lot of opportunity to do trading. The only recourse of action is to really take it somewhere else. Maybe Bitfinex is really afraid that they will be the next BTC-E, being targeted by US authorities so they make this moved to avoid problems. But I don't think this is fair to all US citizens who are trading legally and not doing any money laundering or any illegal acts.