Bitfinex: The Rumors of “Insolvency”, Banking Partners’ Escape, and the Suspension of Fiat Deposits

Bitfinex: The Rumors of “Insolvency”, Banking Partners’ Escape, and the Suspension of Fiat Deposits

On October 8, Hong-Kong-based exchange Bitfinex has announced that it is not under the immediate threat of insolvency and the related rumors are unsubstantiated, as well as false. According to the company’s press release, all cryptocurrency and fiat withdrawals are and have been processing as usual without the slightest interference.

After some mild clarifications, tension is rising in the crypto community – the spread between Bitcoin prices on Bitfinex and other exchanges, on October 15, reached $1,000 against the massive sale of Tether (USDT). In the meantime, Bitfinex is testing its improved solutions, it remains to be seen about the possible consequences for the crypto industry and to be confirmed that this is not a repetition of the story with Mt.Gox, which some traders draw a parallel to, but simply the implementation of a “new and increasingly robust fiat deposit system”.

Banking partner relations

The transparency of the work on one of the leading cryptocurrency exchanges has been questioned as early as October 2. The reason for this was the financial problems of the Puerto Rico’s Noble Bank, which was allegedly engaged in servicing the operations of Bitfinex and Tether Ltd (Bitfinex owners are the beneficiaries of Tether). As reported, the bank has filed for bankruptcy and is now searching for a buyer.

The news about the financial problems of Noble Bank was first published on Sept. 30, 2018. The information came from an insider, who reported on the possibility of a quick liquidation of the bank if it wouldn’t receive support from the holders of large amounts of Tether. The non-publicized connection of the bank with Bitfinex accounts were revealed by the BitMEX exchange researchers.

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