As most people using crypto currencies on a regular basis will know, sending funds over a blockchain requires a small transaction fee (Tx Fee) in order for the relevant mining network to prioritize and confirm the transaction. If the fee is set too low, the transaction could remain unconfirmed indefinitely by the miners. To avoid this, we utilize a dynamic fee algorithm to calculate the appropriate fee to attach to each transaction. This Tx Fee is usually sufficient for the transaction to be included in the next, immediate block.
We understand that time is critically important when it comes to funds being available. As network activity and congestion rise and fall, Tx Fees rise and fall accordingly. We always do our very best to ensure that withdrawals receive the appropriate Tx Fee for the mining network to prioritize the transaction.
Up to now, Bitfinex has never charged users for these Tx Fees, as the amounts involved were relatively small. In the last two years, the fees for Bitcoin transactions, in particular, have significantly increased. At the time of writing, the recommended Tx Fee to have a Bitcoin transaction included in the next mined block is 420 satoshis/byte. For the median transaction size of 226 bytes, this results in a fee of 94,920 satoshis - about $2.20 at the current Bitcoin price.
Our users make thousands of transactions from our platform every day. The costs involved in sending all these transactions have increased to a point where we find ourselves forced to start charging our users the transaction fees.
On Monday, June 05, we will be updating the withdrawals interface to allow users to monitor the current Tx Fee assessed to cryptocurrency withdrawals. At any time, you may visit the fees page to monitor current the Tx Fee for withdrawals. For users of the REST API, please note the new endpoint for requesting current withdrawal fees.
Because withdrawals are sent to the blockchain in combined transactions for multiple withdrawals in a single transaction, we cannot provide an exact transaction cost for your specific withdrawal beforehand. The Tx Fee will be fixed and will automatically update on a periodic basis according to network activity and the associated cost to achieve reasonable transaction confirmation times.
See our Knowledge Base article for more information.
Due to a combination of shareholder interest and popular demand from our customers, Bitfinex has enabled Ripple (XRP) on our trading platform. XRP/USD and XRP/BTC pairs are now available for exchange trading.
Margin trading for XRP pairs will be enabled in the coming days after the order book develops suitable liquidity.
What is XRP?
XRP is an independent digital asset, native to the Ripple Consensus Ledger. With proven governance and the fastest transaction confirmation of its kind, XRP is the most efficient settlement option for financial institutions and liquidity providers seeking global reach, accessibility and fast settlement finality for interbank flows.
While XRP is not required to transact on Ripple, it is uniquely positioned to create more competitive foreign exchange (FX) markets for cross-border payments.
Learn more about Ripple at ripple.com.
As noted in our prior announcement, US correspondent banks continue to block international wires. USD, however, continues to flow domestically in Taiwan and other channels have been slowly ramping up as evidenced by the price spreads narrowing between Bitfinex and other exchanges. Unfortunately, the solutions available to us at the moment are limited to specific customer profiles in certain jurisdictions, though we are working tirelessly to expand our portfolio of deposit and withdrawal options (including support for other fiat currencies) to meet the needs of our global customer base. If and when a customer qualifies for one of these channels, we will reach out to the customer. There is no need to inquire by means of a support ticket.
We have, however, moved the majority of our funds out of Taiwan and the “one-time” withdrawal solution discussed in the prior announcement is coming online. Unfortunately, due to the cumbersome nature of the settlement procedure, we are processing these requests in descending order of size as we learn how to handle the process more efficiently. For the time being, we will only process requests above $50,000 in size. We believe that by the time we are able to get to the smaller withdrawals, other, less cumbersome withdrawal solutions will become more widely available. If you are interested in this option, please submit a normal withdrawal request and reference in a support ticket with subject “USD settlement request” - we will contact you when we are ready to process that withdrawal.
We are deeply grateful for the patience and forbearance that our customers and shareholders have shown us as we work to restore normal operations. We apologize for the inconvenience and look forward to resolving these problems in the coming weeks.
We are pleased to announce that Bitfinex has engaged Friedman LLP to complete a comprehensive balance sheet audit. Friedman, headquartered in New York, has extensive experience working in the cryptocurrency space and we’re excited to be working with them as we take this next step toward cementing customer and shareholder confidence.
Finding a reputable auditor that is crypto-savvy has not been easy. But in the wake of the complete redemption of the outstanding BFX tokens, Friedman saw an opportunity to be part of our recovery story, for which we are both enthusiastic and grateful. We were drawn to Friedman because of their adept partners who hold expertise in the constantly evolving cryptocurrency space. We are confident that Friedman is a great match to meet our accounting needs.
Engaging an auditor is just the first step. The comprehensive balance sheet audit, which will be dated June 30th, 2017, will require considerable time and resources on both sides. A third-party audit is important to all Bitfinex stakeholders, and we’re thrilled that Friedman will be helping us achieve this goal.
In connection with our engagement of Friedman and their expertise in the digital currency industry, we will be undertaking a process to optimize our financial operations and streamline internal accounting procedures as we push toward the goal of having fully audited financials (both balance sheet and operating results) in 2018. Transforming our back office and seeing that change to completion has been and will be a time-consuming and resource-intensive process. We are working diligently on this project and will release summarized results of that audit as soon as it is available.
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]nex.com.
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.