Bitfinex, unfortunately, continues to experience temporary delays in the processing of outbound fiat wires. We are developing alternative channels to address these delays, but this takes time. We appreciate the patience and loyalty demonstrated by our customers and the community in this matter. We were advised by our banks that we would be able to process outbound wires in HKD and CHF, and while we were able to successfully process several such transactions, we are now being told that the moratorium is being extended to these currencies, as well. Domestic transfers in all currencies within Taiwan, however, are working with no problems or delays.
Bitfinex is not alone in the bitcoin community in confronting challenges presented by correspondent banks; other exchanges in the digital currency ecosystem are also being affected. However, we are no longer in a position where we can wait for our existing banking partners to provide viable solutions. Accordingly, we are taking steps to work with our attorneys to ensure they are able to satisfy any requests and claims from customers. We are confident that this short-term solution will allow us to meet our fiat obligations to customers. However, it will likely be a one-time option per customer for USD withdrawals. It is not an ongoing solution to the correspondent banking problem and customers should be advised that they will be required to provide an appropriate acknowledgment of payment for claims in order to receive their fiat funds. Nonetheless, we believe it is important to build this solution for the immediate needs of our customers. This is also taking some time, and we will report back on our progress as soon as we are able.
We want to be absolutely clear here that Bitfinex is solvent. We have assets that exceed all user balances. We also want to emphasize that digital token trading is not affected on Bitfinex. We are developing facilities for different currencies, but in the interim, customers are welcome to trade and to undertake financing on Bitfinex and to deposit and withdraw smoothly using the available suite of digital tokens.
We want to apologize again for this continuing inconvenience, and to assure our customers that we are doing everything to get back to normal operations. We thank you for your ongoing patience.
This announcement is further to our announcement about withdrawal delays on April 13, 2017.
Beginning April 18, 2017, all incoming wires to Bitfinex will be blocked and refused by our Taiwan banks. This applies to all fiat currencies at the present time. Accordingly, we ask customers to avoid sending incoming wires to us until further notice, effective immediately.
We continue to work on alternative solutions for customers that wish to either deposit or withdraw in fiat, and are making progress in this regard. We will continue to update our customers as and when we have more information to share.
Bitfinex is currently experiencing delays in the processing of outbound USD wires to customers. The normal channels that we have been operating through in the past are currently unavailable. Alternative channels are being opened to solve these transmission delays; however, the complexity and scale involved mean that it is taking some time to return to normal withdrawal velocities. Consequently, customers requesting USD wires should expect delays as we work to normalize the withdrawal process. USD deposits remain unaffected.
There is currently no ETA on full normalization of USD wires, but we are working hard to provide alternatives to our customers and will continue to provide updates as we progress. Notably, we can process withdrawals in other currencies, namely, Hong Kong Dollars (HKD) and Swiss Francs (CHF). In addition, we expect to confirm the availability of Japanese Yen (JPY), Australian Dollars (AUD), and Canadian Dollars (CAD) in the next few days, and Euros (EUR) sometime next week. Different currencies have different conversion spreads at our bank, which vary between 0.20% and 0.50% from the interbank market. If you are interested in any of these alternatives, please contact support at [email protected]
As we enable the ability to withdraw in new fiat currencies in the coming weeks, it is our intention to also accept deposits from and list additional trading pairs against the new currencies. The addition of other fiat pairs has been on Bitfinex’s roadmap since September of last year, and recent developments have provided impetus for this functionality.
Users who wish to cancel their pending withdrawals may do so through the interface and have the USD credited back to their accounts. If for any reason you are unable to do so, please contact support.
Please also note that Friday, April 14 and Monday, April 17 are bank holidays in Taiwan and some other jurisdictions, no outbound or inbound wires (in any currency) will be processed on those days.
We are working on a more detailed blog post discussing recent legal actions taken by Bitfinex; but for now, we do want to dispel some of the misinformation that we have seen on the internet:
This is a frustrating situation for everyone. Bitfinex’s management team has been working around the clock to find satisfactory resolutions to these outstanding issues, and we will continue to post updates as we progress. We apologize for any inconvenience that customers may be enduring. We thank you for your patience.
Bitfinex is pleased to announce that we will shortly be redeeming 100% of all currently issued and outstanding BFX tokens. This will be the final redemption of BFX tokens created in August 2016. After these redemptions, no BFX tokens will remain outstanding; they will all be destroyed.
A combination of factors has led to this seminal moment for Bitfinex, including a dramatic uptick in equity conversions; record operating results in March; and, the decision to reduce our reserves in favor of this opportunity. We are tremendously grateful to all of our customers and new shareholders for helping us get to this point. By the end of this week, we will be sending notes directly to our shareholders with more information about what to expect in the coming months.
As for the mechanics of the actual redemptions, we will be taking the steps listed below at 20:00:00 UTC today (April 3, 2017). Most of what follows concerns settling outstanding margin positions, but because BFX tokens are trading so close to their face value, the effects will be quite small. Users who are in margin positions may close them out before settlement, or they may leave them open.
The steps and processes for the final redemptions are as follows:
Overall we expect the entire process to take approximately 25–35 minutes. Trading in all other pairs will continue throughout this process, with the the temporary inconvenience of not being able to withdraw or move between wallets. We apologize in advance for any inconvenience that this may cause any users.
Once again, we are deeply grateful for the patience and trust of our customers and shareholders as we worked towards—and have achieved—full recovery in just eight months. Without the community’s support, Bitfinex could have easily become a footnote in the history of the digital token revolution, instead of a leader and trend-setter. Thank you.
The Bitfinex Team
Due to the complexities surrounding a potential Bitcoin hardfork event, we would like to communicate Bitfinex’s plan for handling the accounting of margin positions and borrowed funding.
We must, once again, strongly urge the Bitcoin mining community to avoid such an event, if at all possible. The knock-down effects on Bitcoin exchanges and their customers could be severe, causing substantial price fluctuations, inefficient price discovery, and needless customer losses.
In the event of a hardfork that results in a chain split, Bitfinex and other major exchanges—such as Poloniex, Kraken, and GDAX—are faced with the challenge of resolving complex accounting issues in margin trading. Ideally, each exchange would agree to a uniform and coherent methodology; however, each serves different audiences and have different market structures, making a universal solution unworkable. For example, Bitfinex has decided to take a different approach than the one proffered by Poloniex. While we understand Poloniex’s approach may make sense for their business, it is not an approach that ultimately satisfies our operational requirements at Bitfinex.
After much analysis, we have chosen to handle the accounting of margin trading and funding based on the model of how stock spinoffs, dividends, and distributions are handled in equity markets. Specifically, in the case of a hardfork event, lenders will receive both BTC and BTU. Anyone that is short BTC/USD or long any BTC trading pair (ETH/BTC, LTC/BTC, etc.) will owe BTU to the lender, effectively making the user short BTU. An exception is in the case that BTC is borrowed but not in use as margin collateral, in which case BTU accrues to the lender. Users that are margin long BTC/USD or short any BTC trading pair will receive BTU.
This methodology is complex and operationally challenging, but we believe it to be the most economically correct and fair approach for Bitfinex and our customers. Furthermore, we believe it is the only approach that will keep the BTC lending market functioning through a hardfork event. Imagine a hypothetical situation where lenders do not receive BTU. They will simply stop lending if a hardfork appears imminent. And while Bitfinex has, rarely, stepped in to become a lender of last resort, in such a dramatic situation Bitfinex would be unable to—and would not want to—cover demand. Consequently, lending liquidity would completely disappear and Bitfinex would be obliged to begin partial liquidations of margin positions using borrowed BTC that could no longer be renewed. We believe that such a hypothetical outcome should be avoided at all costs. Our plan should prevent the negative consequences of this hypothetical and seems likely to allow the funding market to continue to operate.
While our proposed methodology will ensure a functioning lending market for BTC, borrowers must understand that while their P&Ls may climb during a hardfork event, they will have offsetting BTU liabilities that will be applied to their accounts, but perhaps not immediately. At the moment Bitfinex detects a BTU block that is incompatible with the BTC chain, we will immediately halt the processing of all BTC deposits and withdrawals for all users, and freeze all movements for all currencies for any borrower of BTC. This freeze will last until the BTU accounting can be adequately prepared and addressed. BTC borrowers can hedge or estimate this liability with newly listed Chain Split Tokens (CSTs).
We wish to state clearly and publicly that the scope of any disruption associated with a potential hardfork is in the hands of the Bitcoin Unlimited developers. We request that the Bitcoin Unlimited developers implement strong two-way replay protection and wipeout protection so that, if a hardfork event occurs, we can quickly list BTU and resolve accounting issues for customers with BTU liabilities.
More details on the specific procedures will be forthcoming, but we feel that it is important to address the economic implications as soon as possible so that our customers can plan accordingly.
Because of the Qing Ming Jie Festival (Tomb Sweeping Day) in Taiwan our banks will be closed on Monday 3 and Tuesday 4 April.
During those days there will be no wire deposits and withdrawals processed. On Wednesday 5 April the banks open again.
Today, Bitfinex proudly introduces trading on Chain Split Tokens (CST). The first such product of its kind, CSTs will allow Bitfinex customers to speculate on future fork events of the Bitcoin blockchain, specifically, the potential fork between Bitcoin Core and Bitcoin Unlimited. We are designating these CSTs as BCC (Bitcoin Core) and BCU (Bitcoin Unlimited).
CSTs will trade as BTC and USD pairs, initially without margin, and as will any other product with list, we will reevaluate that decision if there is sufficient liquidity.
Users will be able to create CSTs by “splitting” a bitcoin through the Token Manager (located in the Order Type drop down menu of the sidebar order ticket). Once split, the BTC will be removed from your account for each BCC and BCU added. Through the same Token Manager, you will be able to reverse this process at anytime, trading in equal numbers of BCC and BCU to extract BTC.
If no fork occurs by December 31, 2017, then BCU will expire worthless and BTC will be given in exchange for each BCC holder. If, however, there is a fork, specifically Bitcoin Unlimited, then, as soon as we list Bitcoin Unlimited, we will exchange BCU tokens for Bitcoin Unlimited tokens as well as retiring BCC tokens in favor of Bitcoin Core tokens. More detailed information can be found in the Chains Split Token Terms and Conditions.
We are planning a few additional enhancements including a realtime display of total CSTs as well as segregated cold storage for the bitcoins that have been split, which we will periodically settle to and from our hot wallet.
Bitfinex is a signatory to the following statement regarding the potential for a Bitcoin Unlimited hardfork to activate on the network. We felt it was necessary to participate in an exchange industry discussion and to communicate our operational intentions regarding a potentially destabilizing hardfork event. We have an obligation to our customers to provide a clear and consistent plan to minimize potential confusion surrounding such an event.
As always, we thank you for choosing Bitfinex during these volatile and uncertain times.
We are pleased to announce the redemption of 5.00% of outstanding BFX tokens. This redemption was applied pro rata to all wallet balances and margin positions, both long and short, on March 6, 2017, at 19:15:00 UTC. The amount of the redemption is based on February’s strong operating results as well as a small reduction in our contingent liability reserves.
After this redemption and February’s equity conversions, 24,539,683 BFX tokens remain issued and outstanding.
As we are rapidly approaching our goal of retiring all outstanding BFX tokens at full face value of $1, we are making an important change to future equity conversions for both direct conversions and through special purpose vehicles (SPVs). After March 31, 2017, BFX tokens will no longer be convertible into iFinex shares at a 1:1 conversion ratio. Starting April 1, 2017, the new conversion ratio will be 0.8 iFinex shares for 1 BFX token.
We retain and reserve the right to discontinue BFX token conversions at any time.
Due to increased demand from customers and a maturity of the technology, Bitfinex is happy to announce we are adding Dash to our trading platform. The two new trading pairs - DSHUSD and DSHBTC - will open for exchange trading today, March 3rd, 2017.
Margin trading for Dash pairs will be enabled in the coming days.