Bitfinex, the high volume crypto-currency exchange based out of Hong Kong, has announced that it will be terminating business ties with its U.S. individual customers, and has set the deadline for November 9th for all digital tokens be withdrawn from those accounts. This comes after Bitfinex began barring U.S. customers from trading Ethereum-based (ERC20) tokens that were issued from ICOs, back on August 16th.
There are several reasons that the exchange put forth as to why they will conclude doing business with U.S. clients. Bitfinex has had to overcome numerous regulatory obstacles, due to countless draconian U.S. financial laws on the state and federal level.
The following are a few examples of the issues Bitfinex has had to overcome: the exchange itself was fined $75,000 failing to register as a futures commission merchant, by the U.S. Commodities Futures Trading Commission Washington state would not allow the company to offer services to its residents, since it did not obtain a money transmitters license that was required by state law; Wells Fargo, an American financial institution, halted transactions from Taiwanese banks that had worked with Bitfinex; and U.S. withdrawals have been called into question on many occasions after numerous interruptions.
Bitfinex finally considered that with the backlog of U.S. customer verifications, banking issues, and the future U.S. regulatory climate that it was better off leaving the U.S. market. In addition, Bitfinex has made the argument that American clientele make up only a small portion of its revenue, and that U.S. based exchanges would be better positioned to provide a superior level of service. On these grounds, Bitfinex has felt the growing need to effectively dismiss it’s business relationship with U.S. individual customers.
The following statement directly from Bitfinex is as follows:
“This message is further to our announcement of August 11, 2017, with respect to terminating our business with U.S. individual customers. As indicated in the announcement, we are terminating trading, deposits, and withdrawal functionality for U.S. individual customers by no later than November 9, 2017. U.S. customers are already barred from receiving financing from other users on Bitfinex’s peer-to-peer financing platform. This restriction will remain and, in addition, U.S. individual customers will no longer be able to provide financing on Bitfinex effective November 9, 2017. All U.S. individual users must make arrangements to withdraw their Digital Tokens by November 9th.”