{"id":381318,"date":"2019-05-08T14:56:47","date_gmt":"2019-05-08T14:56:47","guid":{"rendered":"https:\/\/wncen.com\/?p=381318"},"modified":"2024-06-11T07:40:18","modified_gmt":"2024-06-11T07:40:18","slug":"trouble-bitfinex-posts-record-high-net-bitcoin-withdrawals-in-april-2019","status":"publish","type":"post","link":"https:\/\/wncen.com\/news\/trouble-bitfinex-posts-record-high-net-bitcoin-withdrawals-in-april-2019\/","title":{"rendered":"Trouble? Bitfinex Posts Record High Net Bitcoin Withdrawals in April 2019"},"content":{"rendered":"

Trust in cryptocurrency exchange BitFinex is on a record decline, a new research highlights.<\/p>\n

London-based blockchain investigation firm, Token Analyst,<\/a> revealed that BitFinex witnessed its most massive net bitcoin outflow in April 2019 at 314,897 BTC. The second most significant withdrawal was 182,425 BTC in January 2018, which coincided with a bitcoin price drop from $17,178 to $9,601. But unlike the last time, the latest Bitcoin withdrawal rate at BitFinex didn’t exactly cause a price crash, indicating that traders were merely moving BTCs from one wallet to another instead of selling them for other assets.<\/p>\n

https:\/\/twitter.com\/ceterispar1bus\/status\/55881216<\/p>\n

Tether FUD<\/h2>\n

Bitcoin withdrawals’ rate at BitFinex started climbing soon after the New York Attorney General sued the exchange and its partner company Tether. The attorney alleged that the duo misled their investors by not disclosing $850 million that BitFinex raised to back Tether’s stablecoin USDT. The misbalance in the line of credit meant that USDT tokens were no longer fully backed by the US dollar on a 1:1 basis.<\/p>\n

BitFinex told the NYAG office that a payment processing company Crypto Capital was in control of those $850 million. The response further mentioned that\u00a0authorities in the US, Poland, and Portugal had seized those assets. However, both BitFinex and Tether added that they did not believe Crypto Capital’s representation that the funds had been appropriated.<\/p>\n

BitFinex had already announced a plan to tackle the situation: an initial exchange offering to raise $1 billion. The exchange released a whitepaper earlier this month, stating that it was planning to sell 1 billion LEO tokens for 1 USDT each to cover its $850 billion\u00a0losses. Taking cues from Binance, BitFinex said it would spend at least 27 percent of its monthly profits to buy back LEO tokens until only 100 million tokens survive. In case the missing $850 billion becomes accessible, BitFinex would buy back the entire LEO supply within 18 months.<\/p>\n

Traders Losing Interest, Anyway<\/h2>\n
\"bitcoin\"<\/a>
Bitcoin Outflow on BitFinex Reaching All-Time High | Source: BitInfoCharts.<\/figcaption><\/figure>\n

Traders have decided to move their bitcoin funds from BitFinex despite the exchange’s tactical response, as clarified in the chart above. The platform’s USD balance is declining, which could be due to investors exiting\/moving their USDT positions to other exchanges. On the whole, BitFinex has seen net outflows of $820m since the NYAG lawsuit. There is a mere $450 million worth of funds that are left in BitFinex cold wallets, per data provided by BitInfoCharts.<\/p>\n

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Quick reminder that #bitfinex<\/a> has seen net outflows of $820m since the NY AG action. And they are not abating – yesterday was the fourth largest day of net outflows since the news. Data from @thetokenanalyst<\/a> #bitcoin<\/a> $BTC<\/a><\/p>\n

— DK \ud83d\udee1\ufe0f (@dkcrypto13) May 8, 2019<\/a><\/p><\/blockquote>\n