Bitfinex has officially announced its decision to freeze bank transfers as a form of deposits as it revealed that its Taiwanese banks have refused to accept anymore wire transfers. Sadly this coincides with the decision by Wells Fargo, one of the biggest investor banks in the US to also refuse to accept wire transfers from the Taiwanese accounts linked to the exchange. Effectively closing many avenues of exchange, there have been many fears regarding the exchanges solvency and legitimacy considering the current situation is reminiscent of the MtGox meltdown years ago.
“Bitfinex is currently experiencing delays in the processing of outbound USD wires to customers. The normal channels that we have been operating through in the past are currently unavailable. Alternative channels are being opened to solve these transmission delays; however, the complexity and scale involved mean that it is taking some time to return to normal withdrawal velocities. Consequently, customers requesting USD wires should expect delays as we work to normalize the withdrawal process.”
Furthermore the situation in the exchange has resulted in Bitcoin prices becoming inflated as many want the quick way out and are rapidly buying up Bitcoin as a precaution to hedge assets and withdraw as much as possible. With not much transparency, the team behind the exchange has also remained shrouded in mystery.
To conclude the Bitfinex situation does leave many worrying about the future of their USD withdrawals and for many it is a sign for oncoming troubles. As with many other big exchanges, the memory of MtGox has meant that the small step from freezing withdrawals to effectively slowing down operations has become closely associated. While the Bitfinex exchange does remain unregulated, it does store its user’s funds unlike NairaEX so chances of losing your assets in the event the exchange does declare bankruptcy and closes operations. While the exchange has shown its reliability by paying out millions of dollars in refunds after becoming compromised, the current restriction of Taiwanese trade is sure to hurt the exchanges credibility in the short term.
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