Bitfinex Exchange Yields to Regulatory Pressure

Bitfinex is a cryptocurrency exchange operating out of Hong Kong. On August 11, 2017, Bitfinex announced that they were no longer accepting new U.S. customers, citing ongoing difficulties handling USD deposits and withdrawals. They have also stated that during the next 90 days, they will be completely disengaging from the U.S. entirely. This means that anyone in the U.S. will need to move their funds off of the Bitfinex exchange.

This move comes directly after US regulators threatened to crack down on exchanges that deal with certain Ethereum tokens produced during ICOs, which may be considered securities under U.S. law. U.S. customers can continue to trade these tokens on Bitfinex until August 16th.

In a later announcement, Bitfinex stated:

"Nothing in our announcement should be taken as fact or opinion that any particular digital token, including any of the digital tokens mentioned in the announcement, are a security pursuant to U.S. law and we apologize if any statements we made were misleading or could be misconstrued."

Despite this statement, it's clear that Bitfinex is attempting to avoid possible regulatory issues in the near future. They also stated:

"We anticipate the regulatory landscape to become even more challenging in the future."

The U.S. is putting increasing regulatory pressure on cryptocurrency exchanges, which may result in many of them abandoning the U.S. in the coming months. Bitfinex is the first major exchange to do this, but will likely not be the last. This could leave U.S. customers with a smaller selection of exchanges, which would decrease liquidity and cause more drastic cryptocurrency price differences between countries.

More information about this can be found on the Bitfinex announcements page. The announcements related to this event are located here and here.

This post also appears on my blog.