Trading news

Bitfinex faces difficulties with banking institutions; other cryptoexchanges doing alright

Bitfinex faces difficulties with banking institutions; other cryptoexchanges doing alright
Oct 19, 2018 by Rico Wise

14 days have not passed since HSBC was set up as the primary bank of Bitfinex to manage deposits and withdrawals, and the cryptoexchange has already switched to Bank of Communications, the No. 5 banking institution in China. However, according to history, the cooperation with Bank of Communications will not hold for long, and this leads up to the main issue with Bitfinex.

The popular digital currency exchange has a style of problem solving that only yields temporary results, ending up changing banks one after another. To do so, they establish shell firms and in-house bank accounts, so when the account gets terminated, the exchange simply moves on.

Recently, the exchange has released a statement, which stirred up major concerns among merchants and financiers using the cryptotrading platform: it requested the clients to keep the banking data of the firm in secret, explaining that such data is “commercially sensitive and confidential”.

For a multi-billion dollar valued firm, it remains unknown why the cryptoexchange remains incapable of establishing a reliable banking partner.

Some specialists believe that Bitfinex has got itself in such situation due to insufficient transparency and the inability to stick with one jurisdiction. The other cryptoexchanges do not have to deal with such issues simply because they totally engage in KYC policies and are either partially or completely regulated, also having the banking institutions in the same jurisdiction where they are located.

Overall, the concern is that in the end, Bitfinex will be unable to obtain a permanent solution to its problems with banking institutions, which in turn would lead the exchange to a loss of loyal customers.

Linked pages

Related news

Related companies

Digital asset trading platform
Rating
4 of 452
HSBC is one of the world’s largest banking and financial services organisations
Rating
216 of 452
The fifth-largest bank in mainland China
Rating
399 of 452