Bitfinex is one of the top digital currency trading platforms in the world. The exchange has been in the news recently for several reasons. Earlier this month, the trading platform obtained banking services from HSBC. Bitfinex made HSBC its primary bank to process withdrawals and deposits. Just a week after obtaining the banking services of HSBC, the trading platform moved to Bank of Communications.
According to The Block, Bank of Communications is the 5th largest bank in Hong Kong and mainland China. Via a partnership with Prosperity Revenue Merchandising Limited, Bitfinex has also secured a temporary channel to handle deposits to its trading platform. However, it seems that the partnership between Bank of Communications and Bitfinex is for the short-term.
Bitfinex Tend to Encounter More Banking Issues than Other Trading Platforms
Bitfinex seems to be facing more banking problems than other digital currency trading platforms. The issue with the exchange is that its solution to its banking problems is just temporary. It’s been switching between banks by creating private bank accounts and shell companies. This firm does this with different banks so that if one account is closed down, they can continue their operations with the next bank.
Recently, the exchange asked its investors and traders to keep the banking details of the firm private. This information was released by the firm on its official website. Bitfinex said bank information is confidential and commercially sensitive. The firm said it would only be released for purposes of contributing to good faith funding.
Bitcoin (BTC) Price Today – BTC / USD
Bitfinex is worth over $8 billion. The trading platform has millions of users all over the world. The exchange also accounts for one of the highest daily digital currency trading volumes in the world. However, there are lots of concerns about the firm not being able to obtain a stable banking service. The recent banking issues of the firm have created concerns among its investors and users.
Yoni Assia said the unresolvable banking problems of the exchange might be as a result of the lack of transparency in the operations of the exchange. Yoni Assia is the CEO of eToro. He also said it might be due to the failure of the platform to establish its exchange in a certain jurisdiction.
The way the trading platform acquires banking services from different banks, by establishing shell companies, might be the cause of its problems. The strategies used by the firm makes it difficult for them to establish a trusted relationship with larger financial institutions. It is obvious that the trading platform lacks a degree of communication and transparency.
Chances are banks don’t even want to establish strong relationships with the Bitfinex due to its history. The exchange has some history and unclarified operations underneath. This might be the reason why banks have refused to establish strategic partnerships with the trading platform.
However, if this trend continues this way, it might affect Bitfinex significantly. If the trading platform fails to resolve its banking solution permanently, its loyal customer base might be affected. This is because its services will become less stable and less convenient for its users. This will affect the trading volumes on the platform as well as its rankings.