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Bitfinex Disables Fiat Deposits, Question on Solvency & Future Services

Bitfinex Disables Fiat Deposits, Question on Solvency & Future Services

Bitfinex Disables Fiat Deposits, Question on Solvency & Future Services

​​Five days after the withdrawal of a lawsuit against the $255 billion bank Wells Fargo, Bitfinex officially disabled fiat deposits to its bitcoin trading platform.

In an announcement made on April 17, the Bitfinex team stated:

“Beginning April 18, 2017, all incoming wires to Bitfinex will be blocked and refused by our Taiwan banks. This applies to all fiat currencies at the present me. Accordingly, we ask customers to avoid sending incoming wires to us until further noce, effective immediately. We continue to work on alternative solutions for customers that wish to either deposit or withdraw in fiat, and are making progress in this regard.”

The temporary suspension of deposits to the Bitfinex platform is a direct result of an unresolved conflict between Bitfinex, four Taiwanese banks and Wells Fargo.

On April 5, Bitfinex  filed a lawsuit against Wells Fargo, accusing the bank for prohibing four Taiwanese banks First Commercial Bank, Hwatai Commercial Bank, KGI Bank and Taishin Internaonal Bank from providing financial services to Bitfinex and its customers.

The official court document read:

“Wells Fargo has suspended U.S. dollar wire transfer operations needed to remit to plaintiffs’ customers U.S. dollars that the customers deposited with plaintiffs to purchase digital currency, causing imminent and irreparable harm to plainffs.”

Attorenys of IFinex Inc, the parent company of Bitfinex, further emphasized the involvement of Wells Fargo in the termination of banking services by the four above mentioned Taiwanese banks. Bitfinex stated that such abrupt suspension of services led to a significant discomfort for users who have been solely relying on the banking services of Taiwanese banks to deposit or withdraw their funds to and from the Binex platform for the past few years.

In its lawsuit, the Bitfinex legal team accused Wells Fargo of deliberately interfering with the operaons of Bitfinex , creating a difficult and impraccal ecosystem for Bitfinex  traders and customers.

“Plainffs hold or have held customers’ deposits in accounts at one of four Taiwan‐based banks: Hwatai Commercial Bank, KGI Bank, First Commercial Bank and Taishin Bank. Plainffs have contracts with each of these Taiwan‐Based Banks to conduct business on their behalf with internaonal financial instuons that are not affiliated with plainffs, including U.S. banks such as Wells Fargo, pursuant to correspondent bank agreements. However, plaintiffs are not direct customers of the U.S. Banks. Wells Fargo is a correspondent bank for the Taiwan‐Based Banks,” the document read.

Last week however, Bitfinex  withdrew its lawsuit against Wells Fargo due to the decision of the court. Bitfinex representative Brandon Carps reaffirmed the plan of the company to secure strong relaonships with alternative financial service providers and intermediaries in order to continue serving its customers.

Although Bitfinex did receive criticisms from some of its customers, the majority of the bitcoin community protected the company, considering its latest effort to repay of all of the investors who suffered from a multi‐million dollar hacking aattck in late 2016.

Bitcoin investor at Atlanta Digital Currency Fund Alistair Milne wrote:

“Prttey sure a company that was honest about a hack/theft isn't going to start lying about their solvency or problems now.”

Author : Joseph Young

Joseph Young is a finance and tech journalist based in Hong Kong. He has worked with leading media and news agencies in the technology and finance industries, offering exclusive content, interviews, insights and analysis of cryptocurrencies, innovative and futuristic technologies.

Bitfinex Bitfinex platform Taiwan banks Wells Fargo