Bitfinex's Problems Pile Up: Deposits Disabled, Withdrawals Delayed – Featured Bitcoin News


Bitfinex's Problems Pile Up: Deposits Disabled, Withdrawals Delayed

Following the fiasco with Wells Fargo over outgoing wires, Bitfinex now has problems with incoming wires as well. “Stopping money deposits to Bitfinex” is the headline of the announcement the exchange posted on its website. U.S dollar withdrawals are currently delayed and all fiat deposits have been disabled at the exchange.

Also read: Bitfinex Sues Wells Fargo Over Wire Transfer Suspension

Incoming Wires Blocked

Bitfinex posted an announcement on its website on Monday morning, stating that:

Beginning April 18, 2017, all incoming wires to Bitfinex will be blocked and refused by our Taiwan banks. This applies to all fiat currencies at the present time. Accordingly, we ask customers to avoid sending incoming wires to us until further notice, effective immediately.

The company has not yet revealed the reason for the Taiwan-based banks to block its incoming wires, so all the community knows at this time is that they cannot get their local currency into or out of the exchange. Following the announcement, Bitfinex tweeted, “While we develop additional currency offerings, we’re disabling USD deposits until further notice.”

First, Outgoing Wires Were Suspended

Much of Bitfinex’s banking setup was revealed in its lawsuit document filed against Wells Fargo & Company and Wells Fargo Bank on March 5. It states that customers’ funds are Bitfinex's Problems Pile Up: Deposits Disabled, Withdrawals Delayedheld at four banks in Taiwan; Hwatai Commercial Bank, KGI Bank, First Commercial Bank and Taishin Bank.

Wells Fargo was acting as a correspondent bank for the four Taiwan-based banks. Outgoing wires to customers in the U.S., sent by Bitfinex from one of the Taiwan-based banks, were processed by Wells Fargo before depositing into customers’ accounts. Since Wells Fargo suspended Bitfinex’s outgoing U.S. dollar wire transfers, customers withdrawing U.S. dollars were experiencing delays.

Since the trouble with Wells Fargo started, Bitfinex has repeatedly assured its customers and the community that it is solvent and its funds were not frozen by Wells Fargo. As a correspondent bank, Wells Fargo was not in possession of Bitfinex’s funds. The bank could only block transactions sent by the Taiwan-based banks. According to the lawsuit document:

Bitfinex currently has virtual currency equal to approximately $430 million USD and customers deposits in banks in Taiwan equal to approximately $130 million USD.

Withdrawals Delayed

Following the outgoing wires suspension by Wells Fargo, Bitfinex issued an announcement on April 13, warning customers of U.S. dollar withdrawal delays. At the time, deposits were Bitfinex's Problems Pile Up: Deposits Disabled, Withdrawals Delayednot affected yet.

“The normal channels that we have been operating through in the past are currently unavailable,” the exchange stated at the time. “Alternative channels are being opened to solve these transmission delays; however, the complexity and scale involved mean that it is taking some time to return to normal withdrawal velocities.”

In addition, Bitfinex wrote, “We continue to work on alternative solutions for customers that wish to either deposit or withdraw in fiat, and are making progress in this regard.” However, the exchange did not give an estimate of how long it would take for withdrawals to return to normal.

What do you think is going on at Bitfinex? Let us know in the comments section below.

Images courtesy of Shutterstock and Bitfinex

Tags in this story
BitFinex, correspondent bank, deposits, Lawsuit, suspension, Taiwan, Wells Fargo, Withdrawals

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Kevin Helms

A student of Austrian Economics, Kevin found Bitcoin in 2011 and has been an evangelist ever since. His interests lie in Bitcoin security, open-source systems, network effects and the intersection between economics and cryptography.

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