A few days ago, the bitcoin world received a bit of a nasty surprise. To be more specific, Bitfinex has close to US$130m worth of customer funds frozen by the Wells Fargo bank. However, it now appears this problem is much bigger than originally anticipated, as reports are circulating both US and Canada users cannot perform USD withdrawals properly. This is a big problem that needs to be resolved as soon as possible.
What Is Going On With Bitfinex?
Most bitcoin users are aware of how Bitfinex is currently engaged in a lawsuit against Wells Fargo. The US bank has suddenly decided to no longer process iFinex Inc and Tether withdrawals, without alerting either company of this decision. As a result, Over US$180m worth of customer funds is inaccessible, and the lawsuit is – hopefully – a way to resolve this issue once and for all. Assuming the issue can be resolved, it is doubtful either company will work with this bank again, though.
Unfortunately, it now seems these issues are not only affecting Wells Fargo customers. Instead, it now appears hardly anyone in the US or Canada can withdraw money from Bitfinex. Do keep in mind this is an unofficial report, as nothing has been confirmed by the exchange or its parent company so far. However, it appears users can still buy bitcoin and transfer those balances to a different exchange before converting it to fiat currency.
This begs the question as to why the bitcoin price rallied so much as of late. Since Bitfinex users – allegedly – can’t withdraw funds, they have to keep money in bitcoin for the time being. Additionally, the exchange recently redeemed the remaining 99% of outstanding BFX tokens all at once. Many people thought that was quite a feat, but if they are “holding funds hostage”, it is not hard to see how the company pulled that off all of a sudden.
It is unclear if Bitfinex is actively working on a new bank partnership as of right now. it seems likely the parent company is solving this problem, although very little information has been made public so far. Any exchange struggling to honor fiat withdrawals is not in a good state right now, that much is certain. We can only hope the company issues an official statement regarding these allegations sooner rather than later. Clearing the air in in their best interest right now, to say the least.
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