Bitfinex Responds To Insolvency Rumors

Last week, rumors about the possible insolvency of exchange Bitfinex quickly followed reports that Noble Bank International, the Puerto Rican institution that counted Bitfinex and Tether among its clients, was looking for a buyer. The Bloomberg article that first reported the Noble story cited an unnamed “person with direct knowledge of the situation” in support of the claims. Noble declined to comment for the article and has apparently still made no announcement about seeking a buyer.

The rumors gained another wrinkle when, on October 3, Bitfinex announced it would be shutting down for routine maintenance the following day. 

The worst fears were never realized. Instead of shutting down and never reopening (as happened with MtGox), on the following day, Bitfinex announced via Twitter that the upgrade was successfully completed: 

On Sunday, the company took to its official blog in an attempt to put the rumors to rest. According to the sharply worded post, “Bitfinex is not insolvent, and a constant stream of Medium articles claiming otherwise is not going to change this.”

However, fittingly for the exchange, which has a tendency to avoid transparency, the post sidesteps one of the main questions at issue: Did Bitfinex lose its relationship with its bank, again? Instead the post states: “Stories and allegations currently circulating mentioning an entity called Noble Bank have no impact on our operations, survivability, or solvency.”

Though the phrasing may imply Bitfinex has little familiarity with Noble, the exchange has had a relationship with the bank since sometime in 2017, though according to a Bloomberg article from May, “Noble doesn’t actually hold the money … Instead, it uses Bank of New York Mellon Corp. as its custodian…”

The post makes no mention of any bank with which Bitfinex does have a relationship, though it allows that “complications continue to exist for us in the domain of fiat transactions, as they do for most cryptocurrency-related organisations.”

So, possibly the exchange is again having issues with its bank. According to reporting from The Block, it is now doing business with HSBC.

Tim Prentiss is a writer and editor for ETHNews. He has a master’s degree in journalism from the University of Nevada, Reno. He lives in Reno with his daughter. In his spare time he writes songs and disassembles perfectly good electronic devices.

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