Exclusive: Bitfinex Reveals Who Is Behind the Exchange Insolvency Rumors
Bitfinex, one of the world’s largest cryptocurrency exchanges, has once again denied speculations as to its possible bankruptcy, reiterating it is totally solvent.
Last week, Bitfinex has issued an official statement to cover the situation which resulted in fiat deposits and withdrawals being temporarily halted. The issues with correspondent banks the statement referenced to, however, aren’t limited to Bitfinex: a number of other exchanges is facing similar challenges. This is also cited among the reasons why bitcoin is traded at a higher price at the Hong Kong-based exchange with premium reaching $110 at times.
However, those attempts to calm down the community backfired: rumors as to the exchange’s inevitable collapse have been spreading at the speed of light in recent days. Some users go as far as claiming that all funds from Bitfinex’s cold wallets have been withdrawn. However, as one may see below, the wallets are far from empty.
Forums and social media are full of other controversial statements concerning the exchange’s present and future. Last week, a post appeared on Reddit claiming “the founder of Bitfinex has a history of supporting Ponzi schemes and the exchange was founded using stolen ‘swiss-cheese’ source code”.
There is also a Twitter account sarcastically named Bitfinextd, which can be seen as a clear reference to the now defunct Mt.Gox. ForkLog has learned that the account belongs to a user known as AtlasRand1 on Reddit. A closer look at AtlasRand1’s comments makes it obvious that Bitfinex and negative rumors about the exchange are the main issues that he or she has had any interest in for the last few months. The user in question also moderates subreddit r/bitfinexinsolvency.
Considering the tightness in the air and lack of up-close information, ForkLog contacted BitFinex with questions about whether the exchange’s administration is aware of those rumors, who they believe might be behind it, and whether the claims of the exchange’s possible bankruptcy have any grounds.
The Bitfinex’s response reads as follows:
“The Twitter account you’re referencing is operated by an individual under different pseudonyms on several social platforms. We’re very familiar with this user and are aware of his position. The owner/operator of @bitfinexed is also AtlasRand1 on Reddit. He also uses another name on Slack, admittedly, but it could be his real name and we don’t wish to potentially expose anyone’s real identity out of respect for their personal privacy.
He has admitted to selling “six figures” worth of Bitcoin on a competitor’s exchange and appears to be financially motivated to campaign against us with a large amount of rhetoric.
Bitfinex is solvent from not only a technical and legal standpoint, but also from a common understanding of being solvent. Asset to liability coverage ratio is > 1 for both iFinex and its subsidiaries. We don’t and never have operated a fractional reserve. Each dollar a user deposits is accounted for and associated with their account, dollar for dollar. Our cold storage Bitcoin wallet has based for the past week as successful domestic Taiwanese wires has expectedly reduced some of the premium pressure relative to other exchanges.
As additional channels are brought online, we expect the premium to dissipate even further.”
ForkLog will continue to gather facts and piece evidence together in order to provide the fullest possible picture of the events. We would like to remind our readers that a cold wallet with fully controlled access is the safest way to store your bitcoins.
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