Bitfinex, the major cryptocurrency exchange platform based in Hong Kong, has hit back at media claims that it has become insolvent, pointing to its public wallet balances as proof. In a blog post published in the first week of October 2018, the company stated that the rumours were wholly unfounded and based on what it referred to as ‘hearsay’.
Citing a concerted media campaign to destabilise them, Bitfinex was responding in part, to information provided in a post a few days earlier from ProofofResearch that customers should ditch the platform while they still could, alleging that there had been a number of complaints as result of crypto and fiat withdrawals being frozen in recent days. This statement was vehemently denied by Bitfinex, who went on to clarify that there had been no such issues, with users of its platform able to withdraw all major currencies without restriction.
Proof of Solvency
In a bid to put its money where it’s mouth is and offer complete transparency, Bitfinex provided links to it’s online wallet reserves, which in total, contain in excess of $1.5Bn, not including its fiat assets. Bitfinex went even further, claiming that this considerable wealth represented just a small percentage of it’s entire crypto holdings.
Far from seeing this illustration of rude health as an indication of the profitability of Bitfinex, ProofofResearch pointed to financial position of one of platform’s ex banking partners Noble Bank from Puerto Rico, which was recently noted as seeking a buyer to turn its fortunes around. That it was connected to Bitfinex so closely, seemingly gives ProofofResearch the grounds required to make, what are quite bold claims relating to the financial health of the platform.
These specific claims were also refuted, with Bitfinex confirming that that it had severed ties with Noble Bank, but stating that the operational status of the bank had no impact at all on its own solvency. Bitfinex are not the only cryptocurrency entity to terminate its connection with Noble Bank, as Tether, the hugely popular Stablecoin has also cut its connections. This would seem to be a unsurprising development however, as Bitfinex and Tether have long since been believed to have close operating links.
Further muddying the waters is the fact that Tether has itself been no stranger to controversy, as it was alleged to have played a part in the artificial inflation of the price of Bitcoin during its 2017 surge. A strong, legally backed attestation in refute of this claim, combined with evidence provided by an earlier official study would seem to point towards the veracity of Tether’s attempt to clear its reputation.
As they say “mud sticks” and it would seem that when allegations of insolvency like these are bandied around, the onus is very much on the defendant to clear their name. With a raft of evidence available to support Bitfinex’s case and the fact that the allegations put forwards by ProofofResearch are perhaps based on supposition, rather than fact, this writer believes that reports of the demise of Bitfinex have been very much exaggerated.
We’d recommend you watch this space in the coming months.