Bitfinex Hits Back to People who Called the Exchange Insolvent

Social media and blogs tend to play an important role in providing information in the cryptocurrency industry. While these mediums are a good source, they are often loaded with FUD’s and rumors by malicious users. Bitfinex is the latest victim of this nasty activity, where some users on Medium have posted that the exchange is insolvent. Bitfinex has issued an official notification which is titled “Response to Recent Online Rumours” coming out clean on the matter.

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Bitfinex comes with a strong revert to rumors

Bitfinex’s rebuttal comes in the wake of last week’s reports which said that the exchange, along with tether, is gone bankrupt. This bankruptcy rumor was also linked to last week’s reports that the exchange’s banking partner, Puerto Rico’s Noble Bank International, is seeking a buyer and had lost both Bitfinex and affiliated firm Tether. One post led to other and the social media was filled with online bloggers claiming that Bitfinex itself was insolvent, citing unverified reports of difficulties processing fiat withdrawals on the platform.

Bitfinex emphatically refuted all such unfounded claims and took aim at critics who “are quick to scream insolvency, seemingly with little understanding of what this concept means and what they are generally talking about”.

Taking these allegation head on the official blog of Bitfinex said

“ Bitfinex 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.”

As proof of this, Bitfinex posted the address of its BTC, ETH, and EOS cold wallets. They contain almost $1 billion of bitcoin core, $400 million of ether and $200 million of EOS. Since the bulk of these assets are presumably customer deposits, they do not, in fact, prove that Bitfinex is solvent.”

Also, read: Bitcoin Exploiting Fiat Volatility in Argentina & Iran, An Opportunity for Crypto Explosion

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Bitfinex calls this a targeted scam

Bitfinex insists that customer fiat deposits are working as normal. It’s also insisted that anything that might be going on with Puerto Rico-based Noble Bank, itself the subject of insolvency rumors, is none of its concern. It’s been revealed that Bitfinex is now banking with HSBC, via an intermediary, though it is unclear whether HSBC is aware of this due to funds being funneled through the private account of Global Trading Solutions.

The blog that Bitfinex released continued saying

“How any rational party can claim insolvency when the opposite is there for all to see is interesting and, once again, perhaps indicative of a targeted campaign based on nothing but fiction.”

With rumors going ripe about Bitfinex’s insolvency, this update from the exchange comes as a relief to Bitfinex users. While the exchange has come out clean there is still uncertainty that looms over Tether.

Will Tether too come out clean or will this controversy take another route in an attempt to malign the image of BitFinex? Do let us know your views on the same.

Nilesh Maurya: 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.
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