Bitfinex Partners with HSBC After Banking Woes

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Bitfinex Partners with HSBC After Banking Woes

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Bitfinex has secured a banking relationship with HSBC, according to Larry Cermak who is Head Analyst at The Block.

The largest USD Bitcoin exchange in the world with over USD 100 million of daily trading volume has gone through serious banking problems since 2017 when Wells Fargo dropped Bitfinex. In May 2018, Bitfinex partnered with Puerto Rico’s Noble Bank, a bank which is now about to go bankrupt. Despite its new relationship with HSBC, the 7th largest bank in the world with more than USD 2 trillion of assets, the exchange continues to battle negative skepticism regarding its insolvency, and deposits and withdraws in all currencies besides USD are disabled on Bitfinex for the time being.

Apparently, Bitfinex has a private account at HSBC under the name Global Trading Solutions, but its director of communications, Kasper Rasmussen, will not officially comment on this.

In 2017, the exchange was located in Taiwan when Wells Fargo closed its account. Bitfinex filed a lawsuit and said, “The decision to initiate legal action is because we cannot allow precedents in this industry where clearing houses can disrupt businesses that are by all metrics complying with the rules in place. If we allow them to simply flip a switch and disrupt business, then there becomes a precedent in the Bitcoin industry beyond just Bitfinex, so we believe it is the appropriate time to take action.”

Bitfinex moved to the Caribbean in May 2018 and set up a relationship with Noble Bank of Puerto Rico. Now that relationship has ended, with Tether Limited moving Tether’s bank accounts out of Noble Bank; the nail in the coffin that could cause Noble Bank to go bankrupt. Tether Limited has confirmed that funds have been moved to other banks but of course, such a drastic change in Tether’s banking has caused uncertainty.

Apparently, Bitfinex’s cold wallet has decreased by BTC 75,000 during the past month and combined with some customers reporting slow withdraws from its platform, this raises suspicion that the exchange has serious problems. However, considering that it is in the process of changing banks, it can be expected that withdraws would be delayed. Bitfinex asserts that they are not insolvent, withdraws are functioning, and Noble Bank’s collapse won’t affect operations.


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