Did cryptocurrency exchange giant Bitfinex play a role in last night’s bitcoin sell-off?
As first reported by The Block, the British Virgin Islands-based but Hong Kong-operated exchange has “temporarily paused” EUR, USD, JPY, and GBP wire deposits, although screenshots from customer accounts circulated on social media suggest that the situation should “normalize within a week.”
Reports had emerged last week that Bitfinex, long suspected to be holding funds at the now-faltering Noble Bank in Puerto Rico, had found a permanent banking partner in HSBC.
Per The Block, Bitfinex was actually banking at Bitfinex through a private account via Global Trading Solutions. Consequently, it’s possible that HSBC was not aware that it was holding Bitfinex assets, and — following the significant press coverage — has suspended or closed that account.
The cryptocurrency market has faced a significant sell-off on Thursday, raising questions about whether there is a connection between the decline and concerns over Bitfinex’s oft-opaque operations.
Bitfinex, as CLC reported, published a blog post earlier this week denying allegations that it is insolvent, though many critics remain unconvinced, particularly given the exchange’s close association with the controversial tether (USDT) cryptocurrency.
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