Bitfinex Refutes Rumors Related To Solvency

Of late, there has been a flurry of postings on the social media platform questioning the solvency of popular crypto exchange Bitfinex. The crypto exchange has made an attempt to ward off the doubts through a blog post.

The posting follows last week’s reports that the banking partner of the crypto exchange, Puerto Rico’s Noble Bank International, has been deserted by both Bitfinex and associated firm Tether. Notably, Bitfinex and Tether shares the same CEO, Jan Ludovicus van der Velde.

Apart from Noble Bank’s story, crypto enthusiasts had posted on various forums that Bitfinex is struggling to remain solvent, referring to unverified reports of issues related to processing of fiat withdrawals on the platform.

As a response to the doubts mentioned above, Bitfinex has clarified as follows: “Bitfinex is not insolvent, and a constant stream of Medium articles claiming otherwise is not going to change this.”

While highlighting the lack of empirical evidence backing such posts, the exchange provided links to three accounts, which it claims to “represent a small fraction of Bitfinex cryptocurrency holdings,” underlining that these “do not take into account fiat holdings of any kind.” The three accounts are referred to as the Bitcoin cold wallet 1, Ethereum cold wallet 1 and EOS cold wallet 1.

The first link shows that the exchange holds 148,467.26 Bitcoin (BTC), a slight decrease from 226,000 BTC held on September 9, 2018. The value of BTC held is approximately $975,700,594 while preparing this article. The second link indicates Ethereum (ETH) holdings worth roughly $385,050,675.

The third EOS (EOS) account was worth nearly $205,410,125 at the time of writing this article. The disclosures are important given the doubts that surround US dollar-pegged stablecoin Tether (USDT). Even though, Tether has volunteered to provide a quasi-auditing report, still, the market has concerns over the dollar reserves it claims to have.

Tether, notably, broke its relationship with third-party auditor in January 2018. As mentioned earlier, the firm only provided an unofficial partial audit in June to prove that each of the Tether it has released into the market is backed by the US dollar on a 1:1 basis.

Pointing to similar attempts to tarnish its image, Bitfinex wrote that the recent allegations of insolvency are “once again, perhaps indicative of a targeted campaign based on nothing but fiction.” The firm also stated that there is no delay in processing both fiat and crypto withdrawal requests and that both are “functioning as normal” for the euros, Pounds sterling, Japanese yen, and US dollars.

Bitfinex, however, did accept that “complications continue to exist” for Bitfinex “in the domain of fiat transactions,” but pointed out that this is prevalent among “most” crypto-related firms.

With regards to reports about Noble Bank, crypto enthusiasts have stated that Bitfinex is now banking with HSBC through a private account operated under the name ‘Global Trading Solutions.’ The exchange has not responded to the new claims so far, but has stated that all circulating rumors related to Noble “have no impact” on Bitfinex’s operations or solvency.