By
Steve Muchoki
April 23rd, 2024
The Hong Kong-based bitcoin trading platform has announced it is immediately leaving retail market in the United States because of challenging regulatory environment.
Bitfinex, one of the world’s leading cryptocurrency exchanges, unveiled on Friday that it will no longer serve customers in the US and within the next 90 days will discontinue services to its existing users.
“We regret to announce that, effective immediately, we will no longer be accepting verification requests for U.S. individuals,” the company wrote in a new post.
According to the company, the decision to curtail the services is due to ongoing difficulties in providing USD deposit and withdrawals for users in the US. Besides, the amount of revenues coming from US accounts is “surprisingly” small. Meantime, a dramatically outsized portion of resources is spent on serving local customers, including legal, support, and regulatory services.
“While we have been able to normalize banking for some corporate customers and individuals in certain jurisdictions, compliant banking solutions for U.S. individuals remain elusive,” Bitfinex said. “We have been slowly and selectively inviting users in particular jurisdictions who meet set criteria to start using banking channels that have come online. This process is ongoing.”
Bitfinex expects that the regulatory landscape in the country will become even more challenging in the future. Exchanges that are not based in the US, the company noted, are better positioned to properly service retail clients in the US.
In order to gradually introduce the changes, Bitfinex will “be communicating further with affected users on timing and specifics.”
“Our intention is to reduce disruption as much as possible for our U.S. customers,” the exchange noted. “We will continue to take advice and implement further changes as circumstances warrant.”
Bitfinex also announced that owners of ERC20, tokens that were issued via ICOs on the exchange, will be barred from trading them via the exchange. This ban will come into effect on August 16, 2017.
In June, the IOTA project listed its token on Bitfinex and faced a huge demand from buyers. In just the first three hours of trading, the exchange traded 4.44 Million Mega IOTA with the IOT/USD pair, while 11.67 Million Mega IOTA were traded with the IOT/BTC set.
In 2016, Bitfinex suffered a hacking attack which resulted in a loss of about 120,000 tokens, forcing the company to issue recovery rights tokens as an IOU to users. Since then, the exchange’s volume significantly increased, what allowed it to pay off the debt at a faster pace. In April, Bitfinex announced 100% redemption of all outstanding BFX tokens issued after the attack. As the company said at the time, “a dramatic uptick in equity conversions” and “record operating results in March” were the main reasons that made the redemption possible.