Type of business | Private |
---|---|
Available in | English, Russian, Chinese, Spanish, Turkish, Portuguese |
Founded | 2012 |
Area served | 52 countries |
Products | Cryptocurrencies Bitcoin, Bitcoin Cash, Ethereum, Ethereum Classic, Litecoin, Ripple, OmiseGO, Monero, NEO, EOS Contents
|
Services | Cryptocurrency exchange, P2P Margin trading, P2P Margin lending, OTC |
URL | www |
Bitfinex is a cryptocurrency exchange owned and operated by iFinex Inc, and is registered in the British Virgin Islands. [1] [2] Bitfinex was founded in 2012. It was originally a peer-to-peer Bitcoin exchange, and later added support for other cryptocurrencies.
Bitfinex was one of the first professional platforms built for cryptocurrency trading. It offers high-volume trading and both spot and derivatives products, including exchange trading, margin trading, margin funding (P2P lending), over-the-counter markets, and derivatives trading. [3]
Bitfinex is the world's second-largest exchange by number of bitcoins held in its digital wallet, and is estimated to have about 403,000 bitcoins. [4]
Bitfinex was founded in December 2012 as a peer-to-peer Bitcoin exchange offering digital asset trading services to users worldwide. Bitfinex initially started as a P2P margin lending platform for Bitcoin and later added support for more cryptocurrencies. It was one of the first professional platforms built for cryptocurrency trading. [5]
Raphael Nicolle, an IT technician from Paris, launched Bitfinex following a previous project called Bitcoinica. He continued to work as a developer for the platform until the beginning of 2017. [5]
Bitfinex was designed to offer high-volume trading and both spot and derivatives products, including exchange trading, margin trading, margin funding (P2P lending), over-the-counter markets, and derivatives trading. [6]
In 2015, Bitfinex partnered with Palo Alto company BitGo to offer highly-secured "wallets" that allow people to store their digital currencies online. BitGo has insurance against Bitcoin theft. [7]
In May 2015, the exchange was hacked, which resulted in the loss of 1,500 Bitcoins or about $400,000 USD of their customers' assets. [8] [9]
In June 2016, the U.S. Commodity Futures Trading Commission ordered Bitfinex to pay a $75,000 fine for offering illegal off-exchanged financed commodity transactions. The order also found that Bitfinex violated the Commodity Exchange Act by not registering as a Futures Commission Merchant. [10]
In August 2016, Bitfinex announced it had suffered a major security breach. [11] Immediately thereafter, Bitcoin's trading price plunged by 20%. [12] After learning of the breach, Bitfinex halted all Bitcoin withdrawals and trading. [2] In that hack, the second-biggest breach of a Bitcoin exchange platform, 119,756 units of Bitcoin, [12] worth about $72 million at the time, were stolen. The Bitcoin was taken from users' segregated wallets and Bitfinex said it was tracking down the perpetrators of the hack. [13] Exchange customers, even those whose accounts were not broken into, had their account balance reduced by 36% and received BFX tokens in proportion to their losses. [14] All users who kept their BFX tokens were reimbursed in full within eight months of the hack, in April 2017. [15] The exchange's access to U.S. dollar payments and withdrawals was then curtailed. The hack happened even though Bitfinex was securing the funds with BitGo, which uses multiple-signature security. [16]
The United States Department of Justice recovered the stolen Bitcoin, [17] and a New York couple, Ilya Lichtenstein and his wife, Heather R. Morgan, was federally charged in February 2022 with conspiring to launder the Bitcoin, which was then worth $3.6 billion. [18] [19] According to Justice officials, Lichtenstein and Morgan are charged with conspiracy to launder money and conspiracy to defraud the United States. [19] On 10 February 2022, it was reported that Heather Morgan was detained in Manhattan on 8 February 2022 with her husband, Ilya Lichtenstein. [20] Lichtenstein and Morgan appeared for a plea hearing on 3 August 2023 in Washington, according to court records. [21] [22] They were charged in the case with a document known as an information, which is a type of charging document that federal prosecutors typically use when defendants have agreed to plead guilty. [23]
Since Lichtenstein and Morgan's arrests, the government seized another $475 million tied to the attack. [24]
In August 2023, Ilya Lichtenstein pleaded guilty to a conspiracy to launder stolen cryptocurrency in Washington, D.C. His wife, Heather Morgan, also pleaded guilty to two charges, money laundering conspiracy and conspiracy to defraud the United States government. The value of the stolen Bitcoin ended up being worth $4.5 billion. [24] [25] [26]
Lichtenstein also admitted to being the original hacker of bitcoin in the 2016 cyberattack on Bitfinex. [24]
Referring to the 2016 hack, IRS Commissioner Charles Rettig said, "This was also the largest single financial seizure recorded by the federal government." [27]
Separately, Bitfinex worked with the U.S. Department of Homeland Security to recover about $315,000 in cash and cryptocurrencies stolen in the 2016 breach. The funds will be redistributed to holders of Bitfinex's Recovery Right Tokens, digital coins issued to people who suffered financial losses due to the hack. [28]
There was concern their customers' money had been lost in several incidents, but the missing funds were not lost but seized and safeguarded. During this same period, Bitfinex found that obtaining banking services was more and more difficult. [29] [30] [31] Research suggests that price manipulation of bitcoin on Bitfinex accounted for about half of bitcoin's price increase in late 2017. [32]
iFinex issued the cryptocurrency Unus Sed Leo in 2019. Once the U.S. announced that most of the stolen funds were recovered, Leo's value surged more than 50%. Bitfinex promised to repurchase and burn outstanding LEO tokens within 18 months of the funds’ recovery. [33]
In April 2017, Bitfinex announced it was experiencing delays in processing USD withdrawals after Wells Fargo cut off [34] its wire transfers. Shortly after the Wells Fargo cutoff, Bitfinex stated all international wires had been cut off by its Taiwanese bank. Since then, Bitfinex has moved between a series of banks in other countries without disclosing to customers where the money is kept. [35] [34] [36]
Noble Bank International of San Juan, Puerto Rico reportedly handled some dollar banking for the exchange in 2017 or 2018. [37] The banking relationship was reportedly terminated in September 2018 as Noble Bank encountered financial difficulties. [38]
In March 2018, British Virgin Islands-based Bitfinex confirmed the exchange’s plans to relocate its primary server infrastructure to Zug, Switzerland.
In May 2018, Bitfinex emailed some of its users asking for some tax details, which the company indicated it would share with the government of the British Virgin Islands, which might, in turn, pass it on to the governments of the users' countries of residence.[ citation needed ]
Phil Potter, Chief Strategy Officer of Bitfinex, left the exchange on June 22, 2018. [39]
On October 15, 2018, Bitfinex said that a few days earlier it temporarily paused fiat deposits for certain customers amid processing complications. On October 7, the company also said that "Bitfinex is not insolvent." [40]
Tether is a cryptocurrency stablecoin pegged to the U.S. dollar. It is owned by iFinex, which also owns Bitfinex. It was launched as RealCoin in July 2014 and was rebranded as Tether in November 2014. As of January 2023, Tether was the third-largest cryptocurrency after Bitcoin and Ethereum with a market cap of $68 billion. [41] Tether and Bitfinex funded the development of HolePunch, an encrypted, peer-to-peer communication platform and made its code open-source in December 2022. Paolo Ardoino, the chief technology officer of Bitfinex and Tether, said that this technology is the "Bitcoin of communications." [42]
In April 2019, New York Attorney General Letitia James launched an investigation accusing Bitfinex of using the reserves of Tether, an affiliated company, to cover up a loss of $850 million to a Panamanian payment processor known as Crypto Capital Corp. [43] [44] Reggie Fowler, who is alleged to have connections with Crypto Capital, was indicted on April 30, 2019, for running an unlicensed money-transmitting business for cryptocurrency traders. [45] He is believed to have failed to return about $850 million to an unnamed client. Investigators also seized $14,000 in counterfeit currency from his office. [45] Bitfinex had been unable to obtain a normal banking relationship, according to the lawsuit, so it deposited over $1 billion with a Panamanian payment processor known as Crypto Capital Corp. No contract was ever signed with Crypto Capital. [44] James alleged that in 2018 Bitfinex knew or suspected that Crypto Capital had absconded with the money, but that their investors were never informed of the loss. [44]
Bitfinex's reported figures for 2017 were $333.5 million in gross profits, $6.8 million in expenses, $326 million in net profit, and $246 million in dividends. [46]
On October 15, 2021, it was announced that Bitfinex would pay a $1.5 million fine to the Commodity Futures Trading Commission for illegal, off-exchange retail commodity transactions in digital assets with Americans. [47]
Bitfinex launched a new payment technology that would allow online merchants to receive contactless and borderless cryptocurrency payments in 2021, called Bitfinex Pay. [48]
Bitfinex, Kraken, and KuCoin began exploring ways to enter the Indian cryptocurrency market in 2021. [49]
In September 2022, Bitfinex, alongside several other leading exchanges, temporarily paused all deposits and withdrawals of Ethereum-based tokens during the Ethereum software upgrade known as the Merge. [50]
In December 2022, Bitfinex released its "Freedom Manifesto," a document that highlights the advancement of distributed, open-source software that aligns with the libertarian ideas of Austrian School economists and cypherpunks' approach to writing code. [42] [51]
As of January 2023, Bitfinex plans to open an office in El Salvador. El Salvador plans to issue its "volcano" token this year, which will be issued using blockchain technology, and which will trade on Bitfinex's exchange. [52] In April 2023, Bitfinex was granted a license by El Salvador’s National Digital Asset Commission to operate in the country. This was the first license for digital service providers in El Salvador. [53] The license permits Bitfinex Securities El Salvador to facilitate tokenized assets. [54] [55]
On May 24, 2023, Bitfinex announced it would invest in the Chilean cryptocurrency exchange Orionx. Bitfinex stated that it aims to expand its presence in Chile and Latin America. [56]
Bitfinex launched its peer-to-peer trading platform in Venezuela, Argentina, and Colombia in June 2023. The platform, Bitfinex P2P, gives people in these countries the ability to directly buy and sell popular cryptocurrencies like Bitcoin, Tether's EURT stablecoin, Tether Gold, and Ethereum. [57]
Tether is a cryptocurrency (a so-called stablecoin) which Tether Limited had claimed to be pegged to the US dollar. Tether is closely associated with Bitfinex, with whom, as of 2018, they shared common shareholders and management. [39]
In 2017, critics raised questions about the relationship between Bitfinex and Tether. [35] [58] [34]
In February 2021, Bitfinex agreed to pay $18.5 million in a settlement with the New York Attorney General's office regarding allegations over Bitfinex parent iFinex making false statements about the backing of Tether and the movement of hundreds of millions of dollars between the two companies to cover up massive losses by Bitfinex in 2017 and 2018. [59] As part of the agreement, Bitfinex will maintain its prohibition on trading activity with New Yorkers. [60]
In 2021, Bitfinex repaid their remaining loan balance to Tether in full. [61]
On August 4, 2023, the class action lawsuit against Tether and Bitfinex was dismissed by Chief Judge Laura Taylor Swain of the U.S. District Court for the Southern District of New York. The court found that the plaintiff lacked "plausible allegations of injury" because there was no evidence showing "USDT had a diminished actual value." [62]
A cryptocurrency exchange, or a digital currency exchange (DCE), is a business that allows customers to trade cryptocurrencies or digital currencies for other assets, such as conventional fiat money or other digital currencies. Exchanges may accept credit card payments, wire transfers or other forms of payment in exchange for digital currencies or cryptocurrencies. A cryptocurrency exchange can be a market maker that typically takes the bid–ask spreads as a transaction commission for its service or, as a matching platform, simply charges fees.
Bitcoin is the first decentralized cryptocurrency. Nodes in the peer-to-peer bitcoin network verify transactions through cryptography and record them in a public distributed ledger, called a blockchain, without central oversight. Consensus between nodes is achieved using a computationally intensive process based on proof of work, called mining, that guarantees the security of the bitcoin blockchain. Mining consumes increasing quantities of electricity and has been criticized for its environmental effects.
A cryptocurrency, crypto-currency, or crypto is a digital currency designed to work as a medium of exchange through a computer network that is not reliant on any central authority, such as a government or bank, to uphold or maintain it.
Coinbase Global, Inc., branded Coinbase, is an American publicly traded company that operates a cryptocurrency exchange platform. Coinbase is a distributed company; all employees operate via remote work. It is the largest cryptocurrency exchange in the United States in terms of trading volume. The company was founded in 2012 by Brian Armstrong and Fred Ehrsam. In May 2020, Coinbase announced it would shut its San Francisco, California, headquarters and change operations to remote-first, part of a wave of several major tech companies closing headquarters in San Francisco in the wake of the COVID-19 pandemic.
Bitstamp is a European cryptocurrency exchange founded in 2011. It is the world’s longest-running cryptocurrency exchange. It allows trading between fiat currency, Bitcoin and other cryptocurrencies, such as USD, EUR, GBP, Ethereum, Litecoin, Ripple, Bitcoin Cash, Algorand, Stellar, and USD Coin. Business operations are conducted from its registered headquarters in Luxembourg City, with a satellite office in Ljubljana.
CoinDesk is a news site specializing in bitcoin and digital currencies. Founded by Shakil Khan, the firm also provides guides to bitcoin for those new to digital currencies.
BitGo, Inc. is a digital asset trust company and security company, headquartered in Palo Alto, California. It was founded in 2013 by Mike Belshe and Ben Davenport. Galaxy Digital announced its acquisition of BitGo in 2021 for $1.2 billion, although this acquisition was announced to have been canceled in 2022 after the crypto downturn, with BitGo continuing as an independent company.
Kraken is a United States–based cryptocurrency exchange, founded in 2011. It was one of the first bitcoin exchanges to be listed on Bloomberg Terminal and was valued at US$3 billion in Jan 2024. The company has been the subject of several regulatory investigations since 2018, and has agreed to cumulative fines of over $30 million.
ShapeShift, founded in 2014 by Erik Voorhees was a cryptocurrency exchange headquartered in Switzerland that turned into a permissionless DAO operating on the blockchain. Its decentralized application empowers users to trade the Bitcoin, Ethereum, and 10,000+ crypto assets across 14 chains.
Bitconnect was an open-source cryptocurrency in 2016–2018 that was connected with a high-yield investment program, a type of Ponzi scheme. After the platform administrators closed the earning platform on January 16, 2018, and refunded the users' investments in BCC following a 92% coin value crash, confidence was lost and the value of the coin plummeted to below $1 from a previous high of nearly $525.
Tether is a cryptocurrency stablecoin, launched by the company Tether Limited Inc. in 2014. As of January 2024, Tether's website lists fourteen protocols and blockchains on which Tether has been minted.
A cryptocurrency bubble is a phenomenon where the market increasingly considers the going price of cryptocurrency assets to be inflated against their hypothetical value. The history of cryptocurrency has been marked by several speculative bubbles.
Binance Holdings Ltd., branded Binance, is a global company that operates the largest cryptocurrency exchange in terms of daily trading volume of cryptocurrencies. Binance was founded in 2017 by Changpeng Zhao, a developer who had previously created high-frequency trading software. Binance was initially based in China, then moved to Japan shortly before the Chinese government restricted cryptocurrency companies. Binance subsequently left Japan for Malta and currently has no official company headquarters.
Cryptocurrency and crime describe notable examples of cybercrime related to theft of cryptocurrencies and some methods or security vulnerabilities commonly exploited. Cryptojacking is a form of cybercrime specific to cryptocurrencies that have been used on websites to hijack a victim's resources and use them for hashing and mining cryptocurrency.
OKX is a global cryptocurrency spot and derivatives exchange and the second biggest crypto exchange by trading volume, serving over 50 million people globally. It was founded by Star Xu in 2017, who is also the CEO as of 2023. The President is Hong Fang and the CMO is Haider Rafique. OKX is owned by OK Group, which also owns the crypto exchange Okcoin.
Changpeng Zhao, commonly known as CZ, is a Chinese-born Canadian businessman. Zhao is the co-founder and former CEO of Binance, the world's largest cryptocurrency exchange by trading volume as of November 2023. He resigned as the CEO in November 2023 after pleading guilty to a money laundering charge in the United States and was sentenced to four months in prison in April 2024.
A stablecoin is a type of cryptocurrency where the value of the digital asset is supposed to be pegged to a reference asset, which is either fiat money, exchange-traded commodities, or another cryptocurrency.
Justin Sun is a Chinese-born Grenadian cryptocurrency entrepreneur and business executive. He is the founder of TRON, a blockchain DAO ecosystem ATM system symbol and USDD, an algorithmic stablecoin issued by TRON DAO Reserve. He also works as an advisor to HTX.
Decentralized finance offers financial instruments without relying on intermediaries such as brokerages, exchanges, or banks by using smart contracts on a blockchain, mainly Ethereum. DeFi platforms allow people to lend or borrow funds from others, speculate on price movements on assets using derivatives, trade cryptocurrencies, insure against risks, and earn interest in savings-like accounts. DeFi uses a layered architecture and highly composable building blocks. Some applications promote high-interest rates but are subject to high risk. Coding errors and hacks have been common in DeFi.
The Bitfinex cryptocurrency exchange was hacked in August 2016. 119,756 bitcoin, worth about US$72 million at the time, was stolen.
{{cite web}}
: CS1 maint: multiple names: authors list (link)