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Bitfinex

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Bitfinex, Inc.
Type of businessPrivate
Available inEnglish, Russian, Chinese
Founded2012; 12 years ago (2012)
HeadquartersHong Kong.
Area served52 countries
ProductsBitcoin, Bitcoin Cash, Ethereum, Ethereum Classic, Litecoin, Ripple, OmiseGO, Monero, NEO, EOS, IOTA
URLwww.bitfinex.com

Bitfinex is a crypto-currency exchange trading and currency-storage 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]

History

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 (the 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 2017, British Virgin Islands-based Bitfinex confirmed the exchange’s plans to relocate its business to Zug, Switzerland.[12]

2017 withdrawal and pricing

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]

Tether

Main article: Tether (cryptocurrency)

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 also

References

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