Bitfinex Exploring Legal Fix For Fiat Currency Transfer Blues
Bitfinex on Thursday announced that the exchange is "developing alternative channels” to address the issue of bank moratoriums on outbound wire transfers of fiat currencies from Taiwan. This follows the freeze that hit the exchange earlier this week.
The issues for Bitfinex, a Taiwan virtual currency exchange, began when Wells Fargo blocked the transfer of USD through the international network to its partner banks, and have compounded since, with a moratorium now extending on outbound transfers of Hong Kong dollars and Swiss francs. Currency holders can make transfers from within Taiwan.
Bitfinex's announcement says the exchange is taking steps with attorneys to ensure their banking partners are capable of meeting their customers’ requests and claims. "We are confident that this short-term solution will allow us to meet our fiat obligations to customers,” the announcement stated. “However, it will likely be a one-time option per customer for USD withdrawals. It is not an ongoing solution to the correspondent banking problem and customers should be advised that they will be required to provide an appropriate acknowledgment of payment for claims in order to receive their fiat funds."
Critics of Bitfinex were quick to dispute the merits of keeping currency on the exchange. On Twitter, @Bitfinexed made a comparison between the exchange and MTGOX.
To everyone that says there is NO WAY BFX is insolvent, we didn't know that MTGOX was insolvent until months later.https://t.co/hSJaiz9OXN— Bitfinex'ed (@Bitfinexed) April 20, 2017
Bitfinex Claims Stability
"We want to be absolutely clear here that Bitfinex is solvent,” the announcement said. “We have assets that exceed all user balances. We also want to emphasize that digital token trading is not affected on Bitfinex. We are developing facilities for different currencies, but in the interim, customers are welcome to trade and to undertake financing on Bitfinex and to deposit and withdraw smoothly using the available suite of digital tokens."
Despite the confidence portrayed in the announcement, the market reacted negatively to Bitfinex's issues. About 3:25 AM on Thursday, the exchange showed a balance of 91.27K BTC. By 6:46 AM the same day the exchange had dropped to 77,270.11 BTC and at press time was hovering at about 76K BTC.