Bitfinex has announced its plan to terminate all services for U.S. individual customers by November 9th 2017. Their announcement comprised a follow-up to a statement issued in August, which indicated the company was suspending all new requests for account verification from U.S. individuals.
Bitfinex Will Suspend Trading, Deposits, and Withdrawal Services to U.S.-Based Customers
Bitfinex will be terminating “trading, deposits and withdrawal functionality for all U.S. customers”, which will come into effect “no later than November 9, 2017.” The announcement urges all U.S.-based customers to withdraw their cryptocurrency tokens before the deadline.
On August 11, Bitfinex first revealed that it would be moving away from U.S. retail customers. The move appeared to be in direct response to the United States Securities and Exchange Commission’s warning that initial coin offering (ICOs) deemed as securities would be subject to existing financial regulations, with Bitfinex barring all U.S-based customers from trading ERC20 tokens that were issued through an ICO within a week of the announcement.
Despite comprising the largest market for USD/BTC trading, Bitfinex stated that it had “for some time considered pulling away from the retail marketplace in the U.S.,” stating that “a surprisingly small percentage of [Bitfinex’s] revenues come from verified U.S. individual accounts while a dramatically outsized portion of our resources goes into servicing the needs of U.S. individuals, including support, legal, and regulatory.”
U.S.-Based Customers Are Unable to Access Financing via Bitfinex’s Platform, and Will Be Barred From Providing Liquidity by November 9th
In light of Bitfinex’s barring of U.S. retail customers, Bitfinex states that “U.S. individuals holding Recovery Right Tokens (RRTs)… may, starting on October 27, 2017, sell all of their RRTs on the exchange.” Bitfinex’s recovery rights tokens were distributed to a group of “BFX token holders [who] have converted their BFX tokens to shares of iFinex.”
BFX tokens were issued to Bitfinex customers following a devastating hack that took place during August of 2016. The fall-out from the attack saw Bitfinex socialize losses by converting 36% of all customers’ holdings into BFX tokens – which were repaid through irregular and unannounced installments at the discretion of the exchange. Bitfinex states that “any RRTs remaining in the hands of U.S. individual verified customers after the November 9th deadline may be sold through Bitfinex on an OTC basis through special arrangement with us.”
Bitfinex has come under increasing scrutiny in recent months for the sharp increase in the number of ‘Tether’, or ‘USDT’, tokens that have been issued. Following Wells Fargo’s suspension of U.S. dollar wire transfers processing services on behalf of Taiwanese banks servicing Bitfinex, speculations have surfaced that the exchange may have used ‘Tether’ as a means to circumvent liquidity problems – with the number of USDT tokens in circulation having increased by approximately 500% since Bitfinex’s banking issues began.
Are you a U.S based trader who trades on Bitfinex? What exchange or exchanges will you use after November 9? Share your thoughts in the comments section below!
Images courtesy of Shutterstock, Bitfinex
Want to create your own secure cold storage paper wallet? Check our tools section.