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Bitfinex is a cryptocurrency trading platform, owned and operated by iFinex Inc.[1][2] Since 2014, Bitfinex has been the largest Bitcoin exchange platform, with over 10% of the exchanges' trading.[3]

Bitfinex, Inc.
Bitfinex logo.svg
Type of business Private
Available in English, Russian, Chinese
Founded 2012; 6 years ago (2012)
Headquarters Hong Kong.
Area served 52 countries
Products Bitcoin, Bitcoin Cash, Ethereum, Ethereum Classic, Litecoin, Ripple, OmiseGO, Monero, NEO, EOS, IOTA
Services Digital currency exchange
Website www.bitfinex.com

Contents

HistoryEdit

In May 2015, 1500 bitcoins were stolen during a hack.[4]

In 2016, Bitfinex was the subject of the Bitfinex hack. In it, $72 million in bitcoin was stolen from the company's customer's accounts.[5] Immediately thereafter, bitcoin's trading price plunged by 20%.[6] After learning of the breach, Bitfinex halted all bitcoin withdrawals and trading.[2]

In that hack, the second-biggest breach of a Bitcoin exchange platform, 119,756 units of bitcoin,[6] which was about $72 million at the time, were stolen. Bitfinex first announced the security breach on August 2, 2016. The bitcoin was taken from users' segregated wallets and Bitfinex said it was tracking down the hack.[7] Significant hacker funds transactions were signed off by Bitfinex's security provider, without full security.[8]

Shortly after the hack, Bitfinex created BFX tokens, which were used to represent customers' stolen equity. The BFX tokens represented $1 and were issued to account for the value of customers cryptocurrencies at the time of the hack. In April 2017, Bitfinex announced they had bought back all of the BFX tokens, essentially paying back all of customers lost funds.[9][10]

Arthur Hayes (co-founder of BitMEX) and others complained about the lack of detail that Bitfinex provided about the hack, saying "There are so many questions about (Bitfinex)... All of this could be easily rectified by just showing all the figures." Der Velde responded that Bitfinex had "been as public and transparent as possible about (the hack) given the ongoing criminal investigations".[11]

In March 2018, British Virgin Islands-based Bitfinex confirmed the exchange’s plans to relocate its business to Zug, Switzerland.[12]

2017 withdrawal and pricingEdit

In April 2017, Bitfinex announced that it was no longer able to let users withdraw their funds in USD,[13] after Wells Fargo cut off[14] its wire transfers.[15] Bitfinex and Tether[14] sued Wells Fargo for the decision but dismissed the case few days later.[16][17] As a consequence, Bitcoins were traded at a price around 100 USD higher than other exchanges[18][19] as users started buying bitcoins in order to move them to other exchanges and withdraw their funds there.[20][21]

Shortly after the Wells Fargo cutoff, Bitfinex stated all international wires had been cut off by its Taiwanese bank.[22] Since then, Bitfinex has moved between a series of banks in other countries, without disclosing to customers where the money is stored.[11][14]

TetherEdit

Tether is a cryptocurrency which Tether Limited claims is pegged to the US dollar[23]. Tether is closely associated with Bitfinex, with whom they share common shareholders.[24]

Critics have raised questions about the relationship between Bitfinex and Tether.[11][25][14]

A spokesperson for Bitfinex and Tether has said that the CEO of both firms is Jan Ludovicus van der Velde.[26][27] Subpoenas from the U.S. Commodity Futures Trading Commission were sent to Tether on December 6, 2017.[27]

See alsoEdit

ReferencesEdit

  1. ^ "Bitfinex - crunchbase". www.crunchbase.com. Archived from the original on 2017-05-08. 
  2. ^ a b Shekhtman, Lonnie (3 August 2016). "Bitcoin security breaches raise questions about digital currency's future". Archived from the original on 28 May 2017 – via Christian Science Monitor. 
  3. ^ "Bitcoinity.org". data.bitcoinity.org. Archived from the original on 2017-08-29. 
  4. ^ Baraniuk, Chris (8 August 2016). "Bitcoin users 'must pay' for lost coins". BBC News. Archived from the original on 5 November 2017. Retrieved 23 November 2017. 
  5. ^ "Bitfinex comes back from $69 million bitcoin heist". Archived from the original on 2017-05-22. 
  6. ^ a b Tsang, Amie (3 August 2016). "Bitcoin Plunges After Hacking of Exchange in Hong Kong". Archived from the original on 18 May 2017 – via NYTimes.com. 
  7. ^ "Bitcoin Worth $72M Was Stolen in Bitfinex Exchange Hack in Hong Kong". Fortune. Archived from the original on 20 November 2016. Retrieved 26 October 2016. 
  8. ^ Suberg, William. "Bitfinex Hack: US Regulation 'Prevented Cold Storage Use'". Archived from the original on 2017-09-18. 
  9. ^ "Announcements > 100% Redemption of Outstanding BFX Tokens". bitfinex.com. Archived from the original on 2017-12-10. 
  10. ^ "Bitfinex Makes Good on Debt, 100% of BFX Tokens Redeemed". news.bitcoin.com. Archived from the original on 2017-12-10. 
  11. ^ a b c Popper, Nathaniel (21 November 2017). "Warning Signs About Another Giant Bitcoin Exchange". The New York Times. Archived from the original on 22 November 2017. Retrieved 23 November 2017. 
  12. ^ "World's Fifth Largest Crypto Exchange Bitfinex Wants To Move To Switzerland". Cointelegraph. 29 March 2018. 
  13. ^ "Bitfinex". www.bitfinex.com. Archived from the original on 2017-04-20. 
  14. ^ a b c d "Tether Theft Isn't the First Controversy for Cryptocurrency Firm". Bloomberg.com. 21 November 2017. Archived from the original on 22 November 2017. Retrieved 23 November 2017. 
  15. ^ "Wells Fargo Lawsuit Shows Banks Still Doubtful of Bitcoin: Report - CryptoCoinsNews". 12 April 2017. Archived from the original on 21 April 2017. 
  16. ^ "Bitcoin Exchange Sues Wells Fargo - PYMNTS.com". www.pymnts.com. Archived from the original on 2017-08-25. 
  17. ^ "Bitfinex files for voluntary dismissal". Mark Karpelès. Archived from the original on 2017-05-23. 
  18. ^ "Bitcoin price". 2017-05-02. Archived from the original on 2017-05-02. 
  19. ^ "Bitcoin Price Sets New Single Exchange All-Time High - CoinDesk". 26 April 2017. Archived from the original on 26 April 2017. 
  20. ^ "Bitcoin Trading at a Near $100 Premium on Bitfinex - CryptoCoinsNews". 21 April 2017. Archived from the original on 17 June 2017. 
  21. ^ Redman, Jamie (27 April 2017). "Bitfinex Price Spreads Bring Uncertainty to Bitcoin's Price Rally - Bitcoin News". Archived from the original on 23 June 2017. 
  22. ^ "Traders Flee Bitcoin Exchange Bitfinex As It Pauses Wire Transfer". Cointelegraph. 18 April 2017. Archived from the original on 22 December 2017. Retrieved 20 December 2017. 
  23. ^ "Tether Whitepaper" (PDF). Tether. 2014. Archived from the original (PDF) on 2018-01-31. 
  24. ^ https://tether.to/wp-content/uploads/2016/06/TetherWhitePaper.pdf
  25. ^ "Crypto-currency company reports $31m raid". BBC News. 21 November 2017. Archived from the original on 22 November 2017. Retrieved 23 November 2017. 
  26. ^ "Bitfinex - Team". www.bitfinex.com. Retrieved 2018-02-25. 
  27. ^ a b Leising, Matthew (January 30, 2018). "U.S. Regulators Subpoena Crypto Exchange Bitfinex, Tether". Bloomberg. Retrieved February 24, 2018. 

External linksEdit