Bitfinex Suspends US Customer Verification And Will Discontinue US Services

An announcement made August 11, 2017, by Bitfinex informs customers that the Honk Kong-based cryptocurrency exchange will no longer accept individual US verification requests.

Effective immediately, according to an announcement on Bitfinex's official website, verification requests by US customers will no longer be approved. Citing a backlog of verification requests, and difficulties in managing withdrawals and deposits, Bitfinex said the decision to pull out of the US marketplace had been under consideration for some time.

The decision also comes on the heels of a Securities and Exchange Commission (SEC) ruling, which acted as a catalyst for Bitfinex's proactive decision to bar US citizens from trading digital tokens that may be identified as securities by the SEC. This restriction is to be generally applied to ERC20 tokens made available via token offerings and will become official policy at noon UTC Wednesday, August 16, 2017. Bitfinex identifies the most actively traded tokens on the exchange that are subject to this restriction as EOS and Santiment.

Bitfinex also said it will eventually suspend all US trading activity, remarking, "Furthermore, over the next 90 days, we will be discontinuing services to our existing U.S. individual customers. We will be communicating further with affected users on timing and specifics. Our intention is to reduce disruption as much as possible for our U.S. customers."

Bitfinex said it had trouble finding compliant banking solutions for US individuals and, although it acknowledged being able to normalize banking channels for corporate customers in specific jurisdictions, revenue from individual US accounts did not provide a large enough profit margin to be feasible given that a "dramatically outsized portion of our resources goes into servicing the needs of U.S. individuals, including support, legal and regulatory."

Bitfinex expressed thanks to loyal customers in the US but said that its obligation to shareholders precluded the possibility of continued services. During the transition, the exchange expressed regret over inconveniences caused due to the policy change, but affirms that the measures are the most prudent "given the regulatory uncertainty surrounding digital assets."

Whether similar restrictions are to be implemented on Bitfinex's recently-announced Ethfinex exchange remains to be seen.