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BY CNA Team - October 9, 2018

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Bitfinex denies allegations of bankruptcy

Bitfinex says all withdrawals of fiat and cryptos functioning, denies the exchange is bankrupt
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The Medium article alleging that the Hong Kong-based crypto exchange Bitfinex is bankrupt has become unavailable.

The article, published on Oct 6, has been taken down but it is not immediately known when the article became unavailable as it was still available on Oct 8 morning.

Meanwhile, Bitfinex had hit back over the allegations of bankruptcy in a blog post a day after the Medium article was published.

Titled “A response to recent online rumours”, the exchange, which has common shareholders and management with Tether, the startup behind the stablecoin, says it “is not insolvent, and a constant stream of Medium articles claiming otherwise is not going to change this”.

“As one of only a very few exchanges operating since 2013, with a small team and low operating costs, we do not entirely understand the arguments that purport to show us to be insolvent without providing any explanation about why,” it says.

The exchange, which revealed crypto holdings in three cold wallets denominated in bitcoin, ethereum and EOS, adds that the amounts held in the wallets represented a small fraction of its holdings and do not consider fiat holdings of any kind.

Up until the time of the blog posting, Bitfinex held 148,467 bitcoins worth US$978.566mil at US$6,591.12 per bitcoin. It held US$398.04mil worth of ethereum and US$211.266mil worth of EOS.

It denied that there were issues with withdrawals of fiat and cryptos, saying that they are functioning as normal.

It says all verified Bitfinex users can freely withdraw euros, yen, pound sterling and US dollars but admitted that like all crypto-related organisations, there were complications where fiat transactions were concerned.

The exchange says stories and allegations currently circulating mentioning an entity called Noble Bank “have no impact on our operations, survivability, or solvency”.

The exchange was responding to a Bloomberg report from last week that says the Puerto Rican bank, Noble Bank, which is facing insolvency, is seeking a buyer for between US$5mil and US$10mil. The bank has stopped all business with the exchange.

The exchange has in the meantime replaced Noble Bank with HSBC, reports over the weekend noted.

Although one of the oldest crypto exchanges around, Bitfinex, together with Tether, has come under the scrutiny of US regulators, being subpoenaed in the beginning of the year related to US dollar holdings and whether the funds are sufficient for the amount of stablecoins “tethered” to greenback.

Image courtesy of Bitfinex website.

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