Crypto Exchange Bitfinex Denies Rumors of ‘Insolvency’ and ‘Banking Issues’
Major crypto exchange Bitfinex has responded to a recent swathe of online rumors, denying that the firm is “insolvent” or facing banking issues, in an official blog post published October 7.
Bitfinex’s rebuttal comes in the wake of last week’s reports that the exchange’s banking partner, Puerto Rico’s Noble Bank International, is seeking a buyer and had lost both Bitfinex and affiliated firm Tether — who share a CEO, Jan Ludovicus van der Velde — as clients. In addition to Noble’s apparent woes, online bloggers were claiming that Bitfinex itself was insolvent, citing unverified reports of difficulties processing fiat withdrawals on the platform.
Bitfinex has today stated that “Bitfinex is not insolvent, and a constant stream of Medium articles claiming otherwise is not going to change this.” Castigating its accusers for failing to substantiate their claims, the exchange posted links to three accounts it says “represent a small fraction of Bitfinex cryptocurrency holdings,” noting that these “do not take into account fiat holdings of any kind”: Bitcoin cold wallet 1, Ethereum cold wallet 1 and EOS cold wallet 1.
The first link indicates that Bitfinex holds 148,467.26 Bitcoin (BTC) – down from circa 226,000 BTC on Sept. 9 2018 – worth $978,758,494 at press time. The second shows Ethereum (ETH) holdings worth around $382,071,909, while the third EOS (EOS) account is valued at $203,406,110 at press time.
Bitfinex’s disclosures are noteworthy given the controversial backstory of U.S. dollar-backed stablecoin Tether (USDT) and concerns over a lack of transparency regarding its dollar reserves: the firm broke ties with its third-party auditor in Jan. 2018, and only issued an unofficial audit in June to prove that the coin is indeed backed 1:1 by the appropriate amount of fiat holdings.
Hinting at past contentions, Bitfinex wrote yesterday that these most recent accusations of insolvency are “once again, perhaps indicative of a targeted campaign based on nothing but fiction,” adding that both fiat and crypto withdrawals are “functioning as normal” for Euros, Japanese Yen, Pounds Sterling and U.S. Dollars.
The firm did however acknowledge that “complications continue to exist” for Bitfinex “in the domain of fiat transactions,” but claimed this is something prevalent among “most” crypto-related organizations.
In response to the Noble Bank reports, some in the crypto space have suggested that Bitfinex has now shifted to banking with HSBC via a private account registered under the name ‘Global Trading Solutions.’ The exchange did not respond to these claims in its post yesterday, although it did say that all Noble-related allegations “have no impact” on Bitfinex’s operations, survivability, or solvency.
Bitfinex is currently the 12th largest exchange globally by daily trade volumes, posting $169.5 million in trades over the past 24 hours to press time.
As previously reported, Bitfinex’s troubled history of banking relationships began in April 2017, when U.S. Wells Fargo & Co. allegedly refused to continue operating as a correspondent bank. Bitfinex then filed a lawsuit against the bank that was quickly dropped.
Both the exchange and Tether both received subpoenas from U.S. regulators last December for undisclosed reasons. Vocal critic and crypto blogger Bitfinex’d has repeatedly voiced concerns about the transparency of their banking systems.