[2018-10-11] Bitfinex Suspends Fiat Deposits

[ICOTelegraph]

➡Bitfinex Suspends All Fiat Deposits


^{Fiat deposits, including USD, EUR, JPY and GBP are paused on Bitfinex. As you remember, recently, details of the alleged insolvency of the exchange were revealed in media}

Users of one of the most popular cryptocurrency platforms Bitfinex report the inaccessibility of deposit option for fiat currencies traded there — USD, EURO, JPY, GBP. Moreover, there are more and more complaints from customers, so perhaps there is a massive shutdown of deposits on Bitfinex.

Meanwhile, some users have signalled problems with deposits and withdrawals of funds for several weeks already. Questions flooded exchange's accounts in Telegram/Twitter. By the way, the Bitfinex team has not yet made any official announcements, and their supports say that they don't have information about such an issue.

«I guess Bitfinex suspends financial problems. Can’t receive my fiat transfer from Bitfinex almost for 3 weeks and support do not reply on any email where I’ve asked them to provide me with swift copy of money transfer»

 — user X

«Why is it, that social media needs to inform me that bank deposits and withdrawals are suspended? 

 — user Y

«It would have been more professional and comforting if BitFinex came with an official statement about this matter»

 — user Z

And no answers were given:

I can't at the moment because I just found out about it too and I am awaiting further instructions. However. I am sure it's nothing too serious, and it is done to protect our customers from delays with deposits

— official support account

Most likely, the problem is related to the poor state of the exchange relative to the bank with which it worked (and probably doesn't work at the moment), i.e. Bitfinex can really be insolvent or at least lose the contractual relationship with a financial organization.

→  See also: most of Tether (USDT) stored on Bitfinex exited. The exchange's hot wallet sent out 100 million in USDT to unidentified addresses.
___
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___

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[gentlemand]

I'm very surprised they've managed to stay ahead of banking shutdowns for as long as they have. For any bank they are an extremely unappetising customer. No regulation, murky ownership in murky jurisdictions and not the most inspiring track record.

It's not as if this is going to improve for them either. They should either go fully legit once and for all or abandon fiat. I'm sure they'd continue to thrive as an alt only exchange with far less customer misery too.

As for this current ball ache it'll work itself out in the wash until the next time.

[LeGaulois]

For 3 weeks waiting for a transfer from it? Weird I haven't heard about people complaining on the web. But if, in fact, there are several people like this, I can feel the drama coming "Banks terminated its account, the exchange is compromised or an authority is currently taking care of Bitfinex"

[coolcoinz]

Most likely, the problem is related to the poor state of the exchange relative to the bank with which it worked (and probably doesn't work at the moment), i.e. Bitfinex can really be insolvent or at least lose the contractual relationship with a financial organization.

I wouldn't call them insolvent just yet. People are so afraid of being Goxed again that they're going into panic mode every time someone posts something about Bitfinex or Tether. It seems that HSBC with which they used to be working with is getting cold feet.
It used to not like cryptocurrencies
https://www.forbes.com/sites/oliversmith/2018/07/19/hsbcs-global-head-of-digital-says-the-bank-is-cautiously-looking-at-crypto-use-cases/#bbfa9d437668

But the money offered by Bitfinex were so tempting
https://www.coinspeaker.com/2018/10/08/new-banking-partner-for-bitfinex-hsbc-replaces-noble-bank/

I think they're going to get this sorted out and it has nothing to do with this rumored insolvency.

[squatter]

I'm very surprised they've managed to stay ahead of banking shutdowns for as long as they have. For any bank they are an extremely unappetising customer. No regulation, murky ownership in murky jurisdictions and not the most inspiring track record.

It's not as if this is going to improve for them either. They should either go fully legit once and for all or abandon fiat. I'm sure they'd continue to thrive as an alt only exchange with far less customer misery too.

As for this current ball ache it'll work itself out in the wash until the next time.

It looks bad, but remember how things turned out last year with Wells Fargo? After a couple months, virtually everyone except for Bitfinex'd forgot about it, and eventually they found new banks to serve them.

I heard they secured a bank account with HSBC, but that it was undeclared and the bank shut it down. Back to the drawing board.

As for the alt-only idea, that's sort of what they did last year during their banking troubles. They kept adding coin after coin without addressing the fiat problems. Unfortunately for them, it's not bubble season this time.

[bbc.reporter]

Was this breaking news what caused the bitcoin dump? I will not be shocked if this turned out to be FUD again hehehe.

I am getting bored with this and I am certain everyone else is beginning to see through the FUD. It will only work until everyone stops believing.

[pixie85]

Was this breaking news what caused the bitcoin dump? I will not be shocked if this turned out to be FUD again hehehe.

I am getting bored with this and I am certain everyone else is beginning to see through the FUD. It will only work until everyone stops believing.

Probably not. The stock market took a hit as well. S&P 500 lost 5% in the last 2 days which is more or less the same as Bitcoin.
https://www.marketwatch.com/investing/index/spx
Bitfinex is having bank problems but it's the bank they recently moved to. Maybe they were disappointed with service.

[bbc.reporter]

@pixie85. No, Bitfinex was not disappointed in HSBC's service hehehe.

Bitfinex opened an account in HSBC by using a different company name, which I reckon is a shell corporation. That appears to have HSBC question the move because shell corporations are usually used for money laundering and tax evasion.

https://cryptonewsreview.com/bitfinex-suspends-fiat-deposits-amid-rumours-of-hsbc-withdrawal/

[gentlemand]

@pixie85. No, Bitfinex was not disappointed in HSBC's service hehehe.

Bitfinex opened an account in HSBC by using a different company name, which I reckon is a shell corporation. That appears to have HSBC question the move because shell corporations are usually used for money laundering and tax evasion.

https://cryptonewsreview.com/bitfinex-suspends-fiat-deposits-amid-rumours-of-hsbc-withdrawal/

I remember Phil Potter, the ex CTO of Bitfinex, saying that they bank like gangsters basically - lying and throwing off the scent wherever possible.

It seems like a very stupid and unsustainable way of operating to me. It ain't 2012 any more. There really aren't that many banks in the world to give your surprise custom to.

[darkangel11]

@pixie85. No, Bitfinex was not disappointed in HSBC's service hehehe.

Bitfinex opened an account in HSBC by using a different company name, which I reckon is a shell corporation. That appears to have HSBC question the move because shell corporations are usually used for money laundering and tax evasion.

https://cryptonewsreview.com/bitfinex-suspends-fiat-deposits-amid-rumours-of-hsbc-withdrawal/

I remember Phil Potter, the ex CTO of Bitfinex, saying that they bank like gangsters basically - lying and throwing off the scent wherever possible.

It seems like a very stupid and unsustainable way of operating to me. It ain't 2012 any more. There really aren't that many banks in the world to give your surprise custom to.

Isn't that why they did not want to follow Japanese regulations and finally got kicked out of the country?  My only hope is that Tether doesn't blow up on us. Too many people do business with Bitfinex every day for them to be playing wild west and ignoring regulators. It's one thing to fight banks and not allow them to push you around and a totally different one if you ignore international law and manipulate prices using tether. If they go down we'll have another Gox. 

[gentlemand]

Isn't that why they did not want to follow Japanese regulations and finally got kicked out of the country?  My only hope is that Tether doesn't blow up on us. Too many people do business with Bitfinex every day for them to be playing wild west and ignoring regulators. It's one thing to fight banks and not allow them to push you around and a totally different one if you ignore international law and manipulate prices using tether. If they go down we'll have another Gox.  

I presume it'll be the same story as why Kraken left Japan. Not enough customers to justify the expense of getting regulated there which is several hundred thousand dollars minimum plus ongoing hassle. Plus they'd have to open up their books and ownership which is something they don't do.

They must be doing just enough to keep regulators at bay, getting rid of Americans is the obvious one. They were also subpeonaed at the start of the year by the CTFC or something yet carried on spewing out USDT so things must be peaceful behind the scenes.

[squatter]

@pixie85. No, Bitfinex was not disappointed in HSBC's service hehehe.

Bitfinex opened an account in HSBC by using a different company name, which I reckon is a shell corporation. That appears to have HSBC question the move because shell corporations are usually used for money laundering and tax evasion.

https://cryptonewsreview.com/bitfinex-suspends-fiat-deposits-amid-rumours-of-hsbc-withdrawal/

I remember Phil Potter, the ex CTO of Bitfinex, saying that they bank like gangsters basically - lying and throwing off the scent wherever possible.

It seems like a very stupid and unsustainable way of operating to me. It ain't 2012 any more. There really aren't that many banks in the world to give your surprise custom to.

But that's also the reason people love them. They've managed to remain at the top of the industry in spite of all their shadiness over the years, and getting hacked for 120K bitcoins. You have to wonder why.

It's offshore in the BVI -- see US v. Coinbase for why that matters. You can trade massive volumes without KYC, and jurisdictional bans are easily bypassed with VPN. They know there's a huge market for this -- bitcoiners love to trade "anonymously" and outside of regulation. Why not spin up a couple dozen more shell corporations and keep it going a while longer?

It'll all end in tears eventually, and I think they know that. By the time the jig is really up, I bet the Bitfinex execs will be sitting on billion dollar bank accounts in places like Panama and Belize and the US government will never find them. I've always thought they were shady, but I also appreciate the way they played the game.

[gentlemand]

but I also appreciate the way they played the game.

Indeed. But I don't think their can-carrying customers will feel the same way when the time is up. What will be will be, but I for one will be far away from there when it happens and it would be better for all if Bitfinex had long since faded into the lower tiers of the rankings when it happens.

[presduterte]

Interestingly tether breached the $0.98 area recently; in the past 4 days its been in a definitive downtrend.

https://coinmarketcap.com/currencies/tether/

Perhaps the Bitfinex price premium is finally beginning to have a negative effect on the price of USDT. I was horrified to learn that Tether won't necessarily process anybody's request for cash out to fiat, and then that Bitfinex was the only exchange with a significant USD/USDT order book.

USDT is becoming a lot more like fiat in that its worth is based on trust in the system.

[J_Crypto]

Last week, rumors about the insolvency of Bitfenix appeared on the network. The company denied this information and said that it faces some difficulties when working with Fiat, but tries to make the Deposit and withdrawal of funds as comfortable as possible.

[bbc.reporter]

@pixie85. No, Bitfinex was not disappointed in HSBC's service hehehe.

Bitfinex opened an account in HSBC by using a different company name, which I reckon is a shell corporation. That appears to have HSBC question the move because shell corporations are usually used for money laundering and tax evasion.

https://cryptonewsreview.com/bitfinex-suspends-fiat-deposits-amid-rumours-of-hsbc-withdrawal/

I remember Phil Potter, the ex CTO of Bitfinex, saying that they bank like gangsters basically - lying and throwing off the scent wherever possible.

It seems like a very stupid and unsustainable way of operating to me. It ain't 2012 any more. There really aren't that many banks in the world to give your surprise custom to.

But that's also the reason people love them. They've managed to remain at the top of the industry in spite of all their shadiness over the years, and getting hacked for 120K bitcoins. You have to wonder why.

It's offshore in the BVI -- see US v. Coinbase for why that matters. You can trade massive volumes without KYC, and jurisdictional bans are easily bypassed with VPN. They know there's a huge market for this -- bitcoiners love to trade "anonymously" and outside of regulation. Why not spin up a couple dozen more shell corporations and keep it going a while longer?

It'll all end in tears eventually, and I think they know that. By the time the jig is really up, I bet the Bitfinex execs will be sitting on billion dollar bank accounts in places like Panama and Belize and the US government will never find them. I've always thought they were shady, but I also appreciate the way they played the game.

Might Bitfinex and its executives be involved in a global money laundering scheme like BTCe? The banks and their exectuvies would not like that, I reckon. They will always want full control over the money laundering industry hehehe.

[gentlemand]

https://bitinfocharts.com/bitcoin/wallet/Bitfinex-coldwallet

Their cold wallet is down nearly 19% in a month. Looks like traders would rather be playing elsewhere.

I've always found it a tad strange that they have a publicly known and viewable cold wallet considering how obtuse they are elsewhere. Maybe they have plenty more.

[squatter]

https://bitinfocharts.com/bitcoin/wallet/Bitfinex-coldwallet

Their cold wallet is down nearly 19% in a month. Looks like traders would rather be playing elsewhere.

I've always found it a tad strange that they have a publicly known and viewable cold wallet considering how obtuse they are elsewhere. Maybe they have plenty more.

Sounds about right.

A moment ago, the price at Bitfinex spiked 9% higher than other exchanges. It's back down to 6-7% now. Some people are definitely exiting Bitfinex as fast as they can via BTC and other cryptocurrencies. It's a little unnerving how fast the price disparity is rising...

[TraderTimm]

I bet you anything the author of this article just ripped it from cointelegraph to monetize it on Steemit. A lot of n00bs love doing that shit.

Second, I give all these shennanigans a 1 out of 4 Goxxes for potential implosion. Possible escalation of this rating to follow if Bitfinex doesn't clear up their deposit problem by October 16th as they're claiming they'll do.

Remember Gox and "Two Weeks" or "Soonish?"

This is feeling verrrrrrry Goxy to me.

[bbc.reporter]

This might be the feared mtgox 2 beginning to occur right in front of everyone. I reckon, after the hacks, the questionable audits and the banks refusing to work with them, we might be witnessing it slowly dying.

Also, tether is a direct competitor to fiat. Central banks do not like competition hehehe.

@TraderTimm. I was writing my post before I could read your new post. But agreed!