Bitfinex Reportedly Banking With HSBC After Abandoning Insolvent Noble Bank
Hong Kong-based crypto exchange Bitfinex published a response on October 7 addressing a number of online rumors about the company's solvency and its operations. Further, a new report claims that Bitfinex is now banking with international bank HSBC.
Hong Kong-based crypto exchange Bitfinex published a response on October 7 addressing a number of online rumors about the company’s solvency and its operations. Further, a new report claims that Bitfinex is now banking with international bank HSBC.
Bitfinex denies all allegations
Questions have been raised within the crypto industry regarding Bitfenix’s relationship with stablecoin issuer Tether, as well as rumors that the exchange is facing imminent insolvency, which the exchange has, of course, denied.
The latest rumor, however, involves Noble Bank, a Caribbean-based banking partner of the exchange, which is reportedly filing for bankruptcy. As Bitfinex’s only banking partner, there are fears that its collapse would adversely affect business operations at Bitfinex.
The cryptocurrency trading platform has dismissed that notion, stating in a Medium post that:
“Stories and allegations currently circulating mentioning an entity called Noble Bank have no impact on our operations, survivability, or solvency.”
A day before the above post, Larry Cermak, a Diar ex-editor and chief analyst at The Block, claims that Bitfinex had engaged HSBC as its new banking partner.
Cermak tweeted that the crypto exchange now uses the services of London’s largest bank, writing:
“Bitfinex is now banking with HSBC through a private account of Global Trading Solutions. Very good fit if you ask me. It’s also worth mentioning that all EUR, JPY, and GBP deposits are paused but Bitfinex ‘expects the situation to normalize within a week.'”
Banking troubles for Bitfinex are not new
Like many other crypto trading and exchange platforms, Bitfinex has faced a myriad of challenges since its launch in 2012, with most being a result of increasingly tighter regulatory crackdowns in countries like Japan, South Korea, China, and the United States.
However, the exchange struggles the most with banks. Bitfinex famously fell out with several banks in Taiwan. Additionally, the exchange sued U.S.-based Wells Fargo for blocking deposits, accusing the banking giant of infringement.
According to court documents, Bitfinex stated that it desired to avoid setting a precedent:
“where clearing-houses can disrupt businesses that are by all metrics complying with the rules in place.”
With the allegations surrounding Noble Bank casting a shadow around its partnership with Bitfinex, the support of HSBC comes at a crucial time for the exchange.
If Bitfinex succeeds in the challenge of sustaining their relationship with the bank beyond the short-term, the sense of stability that has eluded it for a long time may finally return to the exchange.
However, apart from using Global Trading Solutions, it is still not clear if the top leadership at HSBC sanctioned the deal, and both HSBC and Bitfinex have yet to release any official statement regarding the partnership.
Aside from denying allegations, Kasper Rasmussen, a communications director at Bitfinex, told The Block:
“Bitfinex does not, and has never, commented on actual or potential business relationships, and this is not subject to change now.”
Currently, the exchange is ranked 11th in the market according to the adjusted volume, with an average of $180 million in intraday trades. The exchange follows a stricter know-your-customer (KYC) and Anti-Money Laundering (AML) procedures.
It offers both fiat and crypto withdrawals its users have access to withdrawals in major currencies like the Euro, the Japanese Yen, British Pound, and the U.S. Dollar.