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Author Topic: [2017-08-12] Bitfinex Drops US Customers  (Read 4651 times)
nickbelski
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August 12, 2017, 05:18:37 AM
 #1

Bitcoin exchange Bitfinex has just announced that it is pulling out of the US retail market due to the challenging regulatory climate. US customers have approximately 90 days to discontinue all trading, and US holders of ethereum ERC20 tokens have only 5 days to stop trading them on the exchange.


Leading bitcoin exchange by USD volume, Bitfinex, announced on Friday that it is exiting the U.S. retail marketplace. Effective immediately, the exchange no longer accepts verification requests for U.S. Individuals. “We have for some time considered pulling away from the retail marketplace in the U.S.,” the exchange wrote, adding that:

        "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."

Bitfinex explained that “a surprisingly small percentage of our revenues come from verified U.S. individual accounts.” Meanwhile, “a dramatically outsized portion of our resources goes into servicing the needs of U.S. individuals, including support, legal and regulatory.” Citing that it has been able to “normalize banking for some corporate customers and individuals in certain jurisdictions,” Bitfinex admitted that “compliant banking solutions for U.S. individuals remain elusive.” Consequently, the exchange stated:

        "Over the next 90 days, we will be discontinuing services to our existing U.S. individual customers."

Bitfinex expects the U.S. Regulatory landscape to be even more challenging in the future. “Exchanges based in the U.S. are better positioned to properly service retail U.S. Customers,” it wrote.

In addition, the exchange also announced that U.S. customers will no longer be able to trade ERC20 tokens issued through initial coin offerings (ICOs) on the exchange. This part of the changes will commence at noon UTC on August 16.

“Pursuant to the recent report of investigation issued by the U.S. Securities and Exchange Commission,” the exchange wrote to its customers, “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.” Currently, tokens active on the exchange subject to this restriction are EOS and Santiment (SAN).

What do you think of Bitfinex dropping their US customers?

https://news.bitcoin.com/bitfinex-drops-us-customers/

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August 12, 2017, 11:17:35 AM
 #2

This is actually great news. It won't allow them to make more victims if they at some point close their doors and run like there is no tomorrow. I seriously don't understand why people still make use of this exchange, after everything that happened. There are a fair number of exchanges that are fully licensed in each and every aspect, so there is really not an excuse for anyone to point at. It's a bit different, but in more or less a similar way, people shouldn't make use of BTC-E anymore if they happen to be operational again in whatever form or shape. Rewarding an exchange for their illicit acts isn't something anyone here should be doing - and that's exactly what has happened with Bitfinex, as they gained back their leading position in the USD market.

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August 12, 2017, 12:24:53 PM
 #3

This is actually great news. It won't allow them to make more victims if they at some point close their doors and run like there is no tomorrow.
It's not really about that.  It's about the fact that Bitfinex is shit at abiding by regulations and they really don't want to abide by regulations.

Their fears are that working with US customers without abiding by US regulations could leave them in the same situation with BTC-E.  Their concern is completely reasonable, because the only other thing they could do is become really strict with KYC for US customers, and then become really strict for everyone because otherwise it would be hard to prove whether someone was a US customer or not.

If they didn't do this they would either:
-End up like BTC-E
-End up like Bitstamp in that everyone complains that there are way too many KYC regulations.
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August 12, 2017, 12:35:52 PM
 #4

This is actually great news. It won't allow them to make more victims if they at some point close their doors and run like there is no tomorrow.
It's not really about that.  It's about the fact that Bitfinex is shit at abiding by regulations and they really don't want to abide by regulations.

Their fears are that working with US customers without abiding by US regulations could leave them in the same situation with BTC-E.  Their concern is completely reasonable, because the only other thing they could do is become really strict with KYC for US customers, and then become really strict for everyone because otherwise it would be hard to prove whether someone was a US customer or not.

If they didn't do this they would either:
-End up like BTC-E
-End up like Bitstamp in that everyone complains that there are way too many KYC regulations.

They are not shit. US laws and regulations are fucking shit. Why should they invest into lawyers when they can invest into security for example (they should do it lol). I think it's smart move
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August 12, 2017, 02:57:12 PM
 #5

Bitfinex is shaping up to be Mt. Gox 2.0 - Read this article, it spells it out rather succinctly:

https://hackernoon.com/the-curious-tale-of-tethers-6b0031eead87

They may have a bit more runway before they crash and burn, but its going to be rather historic when they do.

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August 12, 2017, 03:09:14 PM
 #6

I can understand it. Dealing with US customers is a high risk business, given the aggressive international enforcement of draconian legislation by the US.

It's better for everyone else, because the risk of a complete closure of the exchange is reduced. The US will be left behind in the cryptocurrency evolution due to overregulation.
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August 12, 2017, 03:17:43 PM
 #7

They are not shit. US laws and regulations are fucking shit.
Irrelevant.  Bitfinex do not have the choice to avoid following them.  That's the lesson that BTC-e learnt.
Why should they invest into lawyers when they can invest into security for example
They can do both.  I suspect they rake in a lot of fees what with the margin trading and listing endless shitcoins.  As for security, hacks of BTC exchanges often seem a bit suspicious when they're not properly audited platforms.  It really isn't so easy to hack BTC wallets if they're handled reasonably well.
Bitfinex is shaping up to be Mt. Gox 2.0
You mean Mt. Gox 4.0.  Mt. Gox + Cryptsy + BTC-e + Bitfinex.

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August 12, 2017, 07:27:09 PM
 #8

They must be feeling the heat coming from the authorities and when looking into the future they realized that the growth of the business is not really in the USA market but somewhere else. They don't want to devote their time and resource on a market with a high level of regulations especially in the future. This can be a good move, actually and I am sure many exchanges would also follow the lead. It is about time they leave the USA behind.

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August 12, 2017, 07:30:04 PM
 #9

Idk, they didn't have any KYC regulations at all so what did people expect? The US hates when people don't abide by their rules so it is going to happen to any unregulated exchanges. They'll say it's because of money laundering, terrorist financing etc. but it's because they want to control the money supply, as we all know I'm sure.
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