Bitfinex Raises New Questions with Banking Solution

Suggestions of shady banking practices are feeding skepticism about the Bitfinex exchange.


Just a day after Bitfinex announced a deposit solution for fiat, skeptical opinions have started streaming in with warnings of dangers and potentially shady banking practices. One of the suggestions was that Bitfinex would not fully notify banks they are working with a crypto exchange and instead use shell companies and their bank accounts on a case-by-case basis.

The reason is that banks, in general, have been known to refuse services for crypto-related purposes, and the Bitfinex exchange is a special case coming under scrutiny for being related to the Tether (USDT) stablecoin and possible Bitcoin price manipulation.

The most critical Twitter account, Bitfinex’ed, has suggested the exchange may resort to “money mules”:

There is also the question of which bank services the Tether stablecoin company, which is linked to the exchange. Tether is supposed to back all USDT in dollars, but after the loss of Noble Bank of Puerto Rico as the chief source of financial services, there is a question of which bank holds the assets that Tether claims to have.

Doubts also surround the Tether partnership with Deltec, a bank based in the Bahamas. Bitfinex’ed suggests the reality of the banking partner and the legitimacy of the bank can be questioned:

One of the banks is legitimate, while the other is an unknown entity that also has “Deltec” in its name.

The banking situation of Tether and Bitfinex adds to concerns about the exchange’s reliability. Besides the capability of handling cash, the platform is losing some of its Bitcoin deposits. At the same time, Bitfinex is attracting more USDT as traders are moving away from the asset.

Skeptics also view the renewed Bitfinex cash deposits as an inherently bad deal since newcomers attempting to purchase Bitcoin would, in fact, buy at a premium to other exchanges. The Bitfinex price for BTC is based on the pair with USDT, meaning the real dollar price of Bitcoin on this exchange would be unfair.

Neither the author nor the publication assumes any responsibility or liability for any investments, profits, or losses made as a result of this information. Cryptocurrency trading and investing are risky propositions, and market participants are advised to always conduct thorough research.

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