Bitcoin Exchange Bitfinex Starts Pausing Wire Deposits

Several days ago, Bitfinex announced delays in the processing of outbound USD wires while now warned customers to avoid sending incoming wires as far as they could not be processed.

Photo: Bitfinex

Photo: Bitfinex

Following the announcement about USD withdrawal delays made several days ago, Bitfinex informs today that all bank transfers will no longer be processed.

The official statement says: “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.”

On April 13th 2017, the exchange unveiled that it experienced delays in the processing of outbound USD wires to customers. As far as normal channels were not available, the exchange opened alternative channels to solve these transmission delays.

Now, Bitfinex assured its customers that it is working on alternative solutions to either deposit or withdraw in fiat. The exchange promised to keep its customers informed about the progress of work.

The announcements come very soon after Bitfinex filed a lawsuit against Wells Fargo for suspending its outgoing U.S. dollars wire transfers at the beginning of April. In addition to “a preliminary and permanent injunction against Wells Fargo,” the exchange is now seeking compensatory damages in excess of $75,000 and any additional relief the court may deem fair as well as a jury trial for the case.

According to the court documents, Bitfinex is not a customer of Wells Fargo. But it is a customer of four Taiwan-based banks that use Wells Fargo as a correspondent bank to process U.S. dollar wire transfers, which is a normal practice in cross-border payments.

Wells Fargo has been serving as a correspondent bank for the Taiwan-based banks for two years. It knew about Bitfinex’s digital currency business through the Taiwan-based banks’ know your customer (KYC) process.

However, in March Wells Fargo announced that it would no longer process outgoing wire transfers for Bitfinex’s correspondent accounts. Neither the Taiwan-based banks expected such a decision, not Bitfinex got any explanations from Wells Fargo.

The Wells Fargo’s sudden action resulted in Bitfinex’s inability to fulfil its obligations to customers and danger to lose existing and prospective customers who could see the failure in wire transfers as Bitfinex’s own fault.

The unexpected news coming from Bitfinex over this month couldn’t but resulted in Bitcoin price movement. The price jumped some $40 in seconds. As of the moment of writing, Bitcoin costs $1,207 on the CoinMarketCap. Experts explain that the price may be artificially inflated as people start buying bitcoins to get out of the exchange.

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