Bitfinex warns customers not to share wire transfer details; Hong Kong link rumoured

As the ongoing saga of Bitfinex, Tether and the pair’s rocky history of interacting with banks continues, customers have been asked not to tell people where they are sending their money to.

Bitfinex has sent a message to its customers asking them not to reveal details about where they are sending their money to or receiving it from, as close scrutiny of the exchange’s nomadic banking arrangements continues – and rumours swirl that its latest home is in Hong Kong.

The controversial exchange – which has strong and, perhaps, questionable links to the not-so-Stable-right-now-coin Tether – has been leading a somewhat itinerant lifestyle when it comes to banks since it began being scrutinised by US authorities during 2017, and was told by Wells Fargo that they would no longer be willing to handle its money transfers. Since mid-2017, it has found temporary banking homes in Poland, Panama and Puerto Rico. Over the last few weeks, it was widely reported that it had been using the services of HSBC – potentially, without his knowledge – though that relationship, such as it was, appeared to break down last week as it was forced to halt fiat deposits.

Now, though, The Block is reporting sources “familiar with the matter” as telling it that the company is now trading through the Hong Kong-based Bank of Communications using a private account of in the name of Prosperity Revenue Merchandising Ltd, using Citibank as intermediary for wire transfers. Again, the article speculates that neither entity – the former of which is part-owned by HSBC – may be aware who it is providing services to.

That last idea makes a recent message sent out to customers wanting to deposit or withdraw fiat funds from the exchange all the more interesting. Even as yesterday it was announcing its “new, improved and increasingly resilient fiat depositing system” it was sending out messages to those looking to use it warning them not to share details of who they were sending money to.

The message was tweeted by The Block’s Larry Cermak.

It begins by telling customers that the information it is providing on where to send money “is being provided to you for purposes of contributing good faith funding to your account on Bitfinex,” and that “At all times, you are subject to our terms of Service.

“This banking information is commercially sensitive and confidential,” it continues. “You should be very careful with this information. You are asked to keep this information to yourself and to not share it except with your financial institution.”

Then, and this is the line that has attracted the most attention, it adds that:

“Divulging this information could damage not just yourself and Bitfinex, but the entire digital token system. Accordingly, you are cautioned that there may be serious negative effects associated with this information becoming public.”

That appears to be a side-swipe at the recent attention crypto news sites – ourselves included – have been giving to the problems with Bitfinex and Tether – and the effect both, particularly the latter, could potentially have on the whole crypto space should they be forced out of business. However, it does not exactly inspire confidence in the former’s business model if it is not willing to openly share where its money is being held.

Just to put things into context, these are not small amount of money being wired around. The minimum fiat deposit to sign up for Bitfinex is $10,000, making it suitable only for relatively large-scale crypto investors. Until the rise of BitMex on the leveraged ‘pro’ trading side, and Binance on the more retail-focused side, it was the dominant exchange in crypto – and still has a large influence on the market as a whole as the seventh biggest exchange by volume.

The general reception among skeptics of the exchange’s practices, are probably best summed up by Jackson Palmer, the c0-creator of Dogecoin and crypto commentator:

For its part, Tether is now being reported as banking with the Bahamas-based Deltec Bank, which appears to have calmed down markets a little – after the Premium on using USDT to buy Bitcoin exploded to over $1,000 earlier in the week.