June 23, 2024

Management; Bitfinex Is Not Collapsing

Management; Bitfinex Is Not Collapsing

Recent media reports have emerged stating that Bitfinex is about to collapse. The Crypto exchange based in Hong Kong has moved to refute the rumors and to assure Crypto traders and investors that the company in on a good financial standing.

The Rumors Started A Year Ago

Misreporting about the collapse of Bitfinex started towards the end of 2017 when reports emerged saying that Bitfinex is about to collapse. The reports alleged that the Crypto exchange would also bring down Bitcoin and Ethereum and throw Crypto markets into a period of bearish trends and massive loses.

Further, the negative publicity also pointed out that Bitfinex stablecoin Tether was headed for a crash that could never be recovered. Some analysts predict that the reports could have contributed to the decline of Crypto markets that started at around that period. The loss of value led Crypto markets capitalization to fall below $200 billion.

The collapse fears, however, died down and a Bitfinex has continued to operate normally. This was until early October 2018 when the reports re-emerged.

The Reports Was Linked To The Collapse Of Noble Bank

Bitfinex is a client of a Puerto Rico based Noble Bank. Earlier this month, reports were leaked to the media that the bank was insolvent and that it was being sold for $5 to $10 million dollars. The news spread panic in the market as some news outlets concluded that Bitfinex could losses deposit and collapse in the process. The fears were compounded when Bitfinex platform temporarily suspended its acceptance of Euros, Japanese Yen and British Pounds in its Crypto exchange trade. This notion acted as proof that Bitfinex could no longer offer quality and dynamic services as a consequence of the event.

Additionally, Tether which is a stablecoin of Bitfinex was also projected to collapse as it is tied to the Crypto exchange.

The Other Side Of The Story

Bitfinex released a blog post on its company website proving that the financial standing of the Crypto exchange is stable.

Firstly, Bitfinex revealed that it holds BTC valued at over $1 billion, ETH valued at over $400 million, and $200 million worth of EOS. The management pointed out that this is just a fraction of what their cold wallet contains.

Secondly, on the concerns of the collapse of Noble Bank, Bitfinex revealed that it has settled on a new financial partner in the UK, the HSBC Bank. The CEO, Larry Cermark, wrote on a Twitter handle that the new account will be offering a Global Trading Solutions.

Lastly, on the issue of suspending trade in the mentioned fiat currencies. The platform played down the concern stating that it is a normal occurrence across Crypto exchange platforms. The management stated that fiat currency transactions are always not easy due to the stringent regulatory environments that government regulations have imposed.

From the Bitfinex perspective, the platform is here to stay and the business model is profitable. There is, therefore, no cause for investors of Tether or platform users to be skeptical or suspend their trading activities.

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