Bitfinex which terms itself as one of the first professional platforms set up to accommodate for the booming interest in cryptocurrency trading is slowly becoming a ground for Crypto whale offloads and huge volume grounds for price manipulators. A position which is taking the goodwill away from Bitfinex.
Huge transactions routed through Bitfinex
An ICO investor who originally received 314,000 ETH from the Ethereum network’s Genesis block, as part of the initial coin offering (ICO), has transferred approximately 20,000 ETH (~$5.5 million) to Bitfinex, one of the world’s most popular cryptocurrency exchanges. This transfer is a part of a larger 93,750 ETH transaction, was first discovered by Los Angeles-based lawyer Zoe Dolan who states that she is watching the Ethereum block explorer, Etherscan, for signs of capitulation.
just a reminder that 93,750 ETH recently went from the genesis block wallet thru to Bitfinex
0x7D04d2EdC058a1afc761d9C99aE4fc5C85d4c8a6 –> 0x0A0fed0ff3495fe93749CDe2B692b7e217dc739c –> 0x976FD26BC177542C3aDE3aA28b374f866E7ddE4B –> 0xc055DF46E91c59EB07eb482d6d8d3EBc7cC5452e
— Zoe Dolan (@ZoeJDolan) August 21, 2018
This isn’t the first large transaction from this anonymous account. In May, the investor moved 116,000 ETH out his wallet, most of which made its way onto the Bitfinex exchange. However, the wallet still holds more than 104,000 ETH, worth approximately $28 million.
It’s not just Ether, a couple of weeks back Twitter users pointed out controversial stablecoin Tether moved over $100 million from a hot wallet to a Bitfinex wallet.
Bitfinex Bitcoin shorts are at an ATH and we just printed $100M tether.
Get your popcorn 🍿 https://t.co/9Kz2UngGUm
— ฿ITLORD🔸 (@Crypto_Bitlord) August 21, 2018
If we look back at news timelines in August 2015, According to Blockseer’s report from the blockchain, three batches of 5,000 coins each, worth $12.4 million in total, were moved, after several months of lying dormant. One of the batches, 5,000 of these coins, were sent to Bitfinex.
Bitfinex becoming the “best” exchange for crypto dumps and price manipulation
Bitfinex doesn’t hold a clean history and is marred by controversies due to these large movements of cryptos either by crypto whales or price manipulators. Definitely not a position any exchange would want to be in. In 2015 it was linked as a hideout for Mt Gox Coins. In 2016 again it was argued by the community that Bitfinex needs a full audit in 2016 as they seized 36% of everyone’s money on their platform. It became critical to know what happened with those customers funds, and if they traded with them. A lot of community participants have also blamed Bitfinex for holding shell corporations to circumvent some practices best known to them.
In December last year, Bitfinex was again pulled up by the US regulator as the US Commodity Futures Trading Commission subpoenaed Bitfinex and the company Tether after investors expressed concerns over these very same price manipulation issues.
In January, reports of the subpoena against Bitfinex and Tether began to surface. Also, Bloomberg had reported that the Department of Justice is working with the CFTC to investigate bitcoin and price manipulation, although that investigation is still in the early stages. It was also claimed by two researchers of the University of Texas at Austin, namely, John M. Griffin and Amin Shams that the Bitcoin prices were artificially inflated in December when the digital gold reached its all-time high at almost $20,000. Wells Fargo, who was the banking partner for Bitfinex, had also cut off all ties with the Asian exchange when finally figured out what the client was actually doing and terminated the account.
With the past Bitfinex has and with all the recent activities that are happening at Bitfinex, even genuine transactions are being closely watched by investors and community as it would be a price manipulation attempt. It would really take Bitfinex really long to clear its image unless it wants to continue this way which is really not a healthy brand image for the exchange.
Will Bitfinex be able to clean up its tarnished image? Do let us know your views on the same.
Nilesh Maurya has been associated for past 8 years as an Investment Banker with Omega Capital, a bespoke Investment Banking outfit having offices in Mumbai, New York, Singapore, and Dubai. He has been a regular contributor to business publications such as Business India and Market Express and has been a mentor to many start-up companies. Nilesh Maurya has been associated for past 8 years as an Investment Banker with Omega Capital, a bespoke Investment Banking outfit having offices in Mumbai, New York, Singapore, and Dubai. He has been a regular contributor to business publications such as Business India and Market Express and has been a mentor to many start-up companies. Follow him on Twitter at @KoinKing1 or connect with me on linkedin.