Is Bitfinex Exchange Secure Enough?

The dynamic of the cryptocurrency market is unpredictable and Bitfinex is not immune to that, creating controversial attitudes among the crypto community

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Thorough research proves several misconceptions regarding the way Bitfinex functions. Founded in 2012 as a peer-to-peer Bitcoin exchange, it gradually added support for more cryptocurrencies. Today it provides trading and analytical tools.

It is the fourth largest cryptocurrency platform for global exchanges with 77 virtual assets. In January 2018, Bitfinex launched the Ethereum trading platform Ethfinex. This move increased the Ethereum-based token trades.

However, the system reached some inconveniences. Users who want to obtain a new account and validate it are required to send proof of present home address and credit card information with all documents translated into English. The account verification process takes up to five weeks.

Concerning the security, the exchange has been a subject to suspicious activity regarding a cyber-hack in 2015 which resulted in customers losing about $400,000. It was followed by a crucial hack in 2016, when more than $72 million was stolen from users’ accounts. Bitfinex managed the situation accordingly by paying back all stolen funds and upgrading its security system.

In April 2017, Bitfinex announced that its access to USD withdrawals and payments had been curtailed after Wells Fargo & Co. – a financial service company that cut off the exchange’s wire transfers. Since then, customers have not been informed where their money is kept. A year later the exchange platform announced that possible relocation to Switzerland is considered.

Later in June 2018, Tether and Bitfinex have once again become a source of criticism when a study done by UTA (the University of Texas in Austin) accused them of the price manipulation of Bitcoin, which skyrocketed in the second half of 2017. The research claims that Tether’s USDT has been used to prop up the price of BTC on the exchange. 

This is not the first accusation as in December 2017 the two entities received a subpoena from the U.S. Commodity Future Trading System.

Despite the negative attention, Bitfinex’s trading volumes are increasing, and the website security is stable. Whether the controversies of Bitfinex will continue or the company will manage to render its credibility remains to be seen.

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