Bitfinex strongly-denies rumours of its impending insolvency

October 08, 2018
Chris Wheal

Bitfinex has sternly-denied rumours of its insolvency in a blog post published on Sunday that criticised a number of articles on the Medium website claiming the cryptocurrency exchange was about to go bust.

Claims of Bitfinex’s impending doom followed the news last week that Puerto Rican financial services group Noble Bank was on the verge of collapse. Bitfinex and the cryptocurrency network that supports the dollar-backed tether stablecoin are prominent customers of Noble.

Both Bitfinex and Tether were widely-reported this weekend to have ended their relationships with Noble. Meanwhile, Bitfinex was reported to have told its clients it was halting its euro and sterling deposit services.

Mt. Gox revisited?

Many felt this was no coincidence, and the rumour of the exchange’s likely demise began to circulate. One Medium post by a contributor with the monicker ProofofResearch, said: “To say that Bitfinex is looking eerily Mt. Gox-esque in form would be an understatement.”

The statement refers to the dramatic bankruptcy of crypto exchange Mt. Gox in 2014, leaving liabilities of around $65m.

ProofofResearch’s post concluded: “Only time will tell how this situation is going to pan out — but it appears that Bitfinex and Tether are beginning to reach the end of their rope.”

Bitfinex responds

Bitfinex responded by posting links to three cold wallets that it said laid bare the facts of its continuing solvency. It added that both fiat and cryptocurrency withdrawals were functioning as normal.

“Verified Bitfinex users can freely withdraw euros, Japanese yen, pounds sterling and US dollars,” it said in the blog post. It added that stories and allegations mentioning Noble Bank had no impact on its operations, survivability or solvency.

“There have been ups and downs along the way, with complications scrutinised by watchful ‘investigators’ eagerly anticipating and predicting the industry’s collapse,” said the blog post.

HSBC deal

On Saturday, it was reported that Bitfinex had ditched Noble Bank and had negotiated a banking services deal with HSBC, the world’s seventh-largest financial services group.

Some remained suspicious, however. Among them crypto and blockchain journalist Amy Castor who posted this on Twitter:

Post written by Chris Wheal
Chris Wheal is editor of OpenLedger's news and features service. An award-wining business journalists himself, he runs a team of freelance journalists from across the UK and north America.

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