In light of recent events, and in response to questions from our users, we wanted to convey some information to the community regarding our security protocols. Generally, we want to remind our users that we are paranoid about security, and have the industry leading standards in place to protect all of our cryptocurrency assets. Specifically, we do the following:
Multisig cold wallets to hold crypto-currencies
We have been using multisig addresses for cold storage since the beginning of December 2014. The vast majority of customer bitcoins are stored in the cold wallets. We do not store more than 0.5% of our assets on hot wallets. Our hot wallets are not accessible from the front-end servers.
Always up-to-date linux systems to host the platform
Our server network is protected by always using up-to-date software and the best possible practices.
Advanced account protection
We offer several options to secure user accounts: Email, OTP authentication and SMS/Voice authentication to validate logins and withdrawals. We have also developed tools to detect unusual account activity that have successfully protected users who have had their accounts compromised in the past.
Trade-only exchanges API keys
API keys are encrypted and not stored in our code or database. These keys provides only the right to get balances and buy and sell bitcoins. Withdrawal are handled on the website through our withdrawal box (which is isolated from the rest of our server network).
Automatic backup of the database once a day
Once a day, the database of the platform is backed up, encrypted and compressed as an archive. The passwords of users it contains are hashed and cannot be stolen. As soon as a new backup is ready (database, log files,...), it is sent to others servers in several physical locations.
Secure storage of customer KYC documents
Once documents are uploaded during the verification process, they are stored separately and are not accessible from the web servers.
Security monitored and audited
Our platform’s security is regularly tested, monitored and audited by third party security experts to detect and prevent any intrusions.
We are committed to making sure that any funds that are entrusted to us are kept safe. While, it is impossible to be 100% secure, we believe that a strong security plan should place an emphasis on minimizing the effect of any attack, which is precisely what we have endeavored to do with the above security protocols.
In an effort to address some of the community’s concerns surrounding the price premium of TH1 over intrinsic value and lack of liquidity on the book, Bitfinex will be making some adjustments to TH1. Firstly, we would like to plainly state that Bitfinex will not tolerate any behavior that we deem to be manipulative. We are looking closely at the behavior of some of the participants and are mulling over some overall rule changes to discourage certain behaviors system-wide – more to come on that later. Just because the platform permits an unintended use pattern does not mean that we won’t take a punitive approach in dealing with those traders trying to exploit loopholes in a manipulative fashion. This contract is a beta product, and we have reserved the right to make adjustments as necessary to improve the integrity of the product. To that end, the following changes will soon go into effect:
|Monday, October 20th, 2014||40%||20%|
|Monday, October 27th, 2014||50%||25%|
|Monday, November 3rd, 2014||60%||30%|
|Monday, November 10th, 2014||70%||35%|
|Monday, November 17th, 2014||80%||40%|
|Monday, November 24th, 2014||90%||45%|
|Monday, December 1st, 2014||100%||50%|
|Wednesday, December 3rd, 2014||100%||60%|
|Friday, December 5th, 2014||100%||70%|
|Sunday, December 7th, 2014||100%||80%|
|Tuesday, December 9th, 2014||100%||90%|
|Thursday, December 11th, 2014||100%||100%|
It will be the responsibility of the traders to insure that their positions are backed by enough collateral to avoid any forced liquidation that may result when MMR is increased. We apologize for any inconvenience caused by these changes as we continue to fine-tune this beta product for future offerings.
We are pleased to offer mining contracts as trading product on the Bitfinex platform. We have worked for some time to develop what we believe is a superior approach to “cloud mining” that is smartly packaged to offer simplicity and transparency. While we are very excited about this offering, please note that we consider this a “live beta” as we continue to tweak the product to meet the need of our traders. Because it is a beta phase product, the first “tranche” is purposely small and short-dated. As we gain experience in administering this product, assess demand, and incorporate feedback from our traders, we will introduced larger and longer dated tranches. The contract specifications follow:
The product is designed as a “depleting asset”, whose value will continue to go down all the way to zero at expiration. Coupled with the fact that all hosting and maintenance is already included, we expect fair value analysis to be much easier for the average trader and cloud miner. TH1 will also be the first shortable mining contract (that we are aware of) further enhancing efficient price discovery. Trading will commence at 9 AM EDT on Monday September 15, 2014. We welcome your feedback and, as always, we thank you for your business and continued support.
In our ongoing effort to deliver the very best in crytocurrency trading, Bitfinex is pleased to announce several changes and enhancements to our margin system that will pave the way for better risk management, product-based margin requirements, and future trading products. We have also decided to streamline some of the associated margin features, updating and harmonizing margin terminology
The net effect of trader behavior and existing positions will be negligible and we look forward to delivering on the possibilities and new opportunities created by these changes. These changes will go into effect on Monday, August 18, 2014 at 00:00 UTC.
Thank you for choosing Bitfinex. We take the trust you place in us seriously, and are always striving to provide the fairest, and most cutting-edge platform in order to enable our customers trading needs.
In an ongoing effort to provide our customers with the best possible trading experience, we are pleased to announce several enhancements to our swaps system. As the swaps market continues to grow, we continue to be extremely focused on ensuring that it operates as fairly and efficiently as possible, while mitigating systematic risks to the greatest extent possible.
Self Funding: To the extent that a trading wallet’s collateral is the correct currency, it will now be automatically used to offset the position’s swap requirements. For example, if a trading wallet contains USD, and the position is long BTCUSD, the USD borrowing requirement will be reduced by the amount of USD collateral. We believe that this change will result in significant cost savings to traders and help make the closely watched aggregate swap statistics more meaningful. This new feature essentially allows traders to pay no swap interest when the positions size is less than their collateral, i.e., “unlevered” (provided, of course that the collateral is held in the correct currency), and avoids the clumsy process of claiming unlevered position as this feature effectively enables traders to perform the economic equivalent of a “partial claim” when the position is reduced in size of more of the correct collateral is deposited in the trading wallet.
Daily Settlement: Up until now, swap interest to liquidity providers has always been paid daily, but swap interest from traders is only collected when the positions is closed. While this makes sense from a certain perspective, it has the unintended consequence of effectively putting Bitfinex in the position of making 0% loans to cover the payments imbalance created by large “unrealized swap” balances, which really should be serviced by the P2P facility that we already have in place. Moreover, from a balance sheet perspective, we feel that it simply makes more sense to match the frequency of the collection and payment process. In order to implement this change, traders will need to select how they wish these daily payment to be made. The system will support a new variable for each position, “Swap Type”, which can have one of two values:
Existing positions will be phased into this process, with daily “catch-up” payments of no more than 10,000 USD.
These first changes will be active on the 21st of July, 2014.
Real-time Autorenew: In the past, the “autorenew” feature for offering swap liquidity was only processed once every 15 minutes, which could sometimes create an offer “vacuum” if large positions were being opened and closed quickly during periods of heightened volatility. We have reduced that interval to less than one minute as we approach a true real-time solution to this important feature.
Swap “Bot”: We will soon be offering traders the ability to automatically replace the swaps that fund their positions with cheaper ones should they be available at the same or better terms, eliminating the rather laborious manual process that is available today. There are many nuances to making this work efficiently and it will be offered on an “opt in” basis, but we anticipate that this feature will make the swap market much more efficient and reduce volatility in the average swap rates. We will provide further updates on the specific functionality by the end of July.
Once again, we wish to thank all of our customers for their continued loyalty, which, in recent months, has made Bitfinex the number one platform for BTCUSD liquidity as measure by trailing 30 day volume. We look forward to serving the community’s ongoing trading needs as we continue to update and improve our trading platform. As always, we welcome your feedback.