May 17, 2023
By Sharan Kaur Phillora
According to reports, Bitfinex is banking with Hong Kong-based Bank of Communications and using Citigroup as an intermediary for USD wire transfers.
Here’s what we know:
Less than two weeks after establishing HSBC as its primary bank to handle deposits and withdrawals, Bitfinex has moved to Bank of Communications, the fifth-largest bank in mainland China and Hong Kong.
Through a corporate alias, “PROSPERITY REVENUE MERCHANDISING LIMITED,” Bitfinex has secured a temporary channel to process deposits to its exchange. But, based on historical evidence, the relationship between the exchange and the Bank of Communications is expected to be short-lived.
The problem with Bitfinex is that its solution to serious banking issues is only temporary. It’s moving bank to bank by creating shell companies, and private bank accounts with different financial institutions so that they can always move to the next bank when existing accounts are shut down.
Bitfinex told its users that bank information is “commercially sensitive and confidential” and is only being provided “for purposes of contributing to good faith funding.” For a company that is supposedly valued at billions of dollars and clears hundreds of millions of dollars worth of trades daily, it remains unclear why the exchange can still not obtain stable banking services.
Given the history of the exchange and various unclarified operations, it’s possible that the banks are unwilling to engage in a strategic partnership with the exchange.
The general sentiment regarding the situation surrounding Bitfinex is that if Bitfinex fails to find a permanent solution to its banking issues, the instability of its services could hinder its loyal user base.
About the author
Sharan Kaur Phillora’s thirst for knowledge has led her to study many different subjects, including NFTs and Blockchain technology – two emerging technologies that will change how we interact with each other in the future. When she isn’t exploring a new idea or concept, she enjoys reading literary masterpieces.
