The ghost of MtGox stalks Bitfinex

As various users and observers have been warning in the Bitfinex community, it could be experiencing liquidity problems. The serious problems and delays in the withdrawal of money in the exchange point to a symptomatology very similar to the one that led to the fall of MtGox. The risk may be related to the connection between Tether and Bitfinex and the concerns regarding information that normally should be in the 2016 audit and that seems to have been altered later.

Some users claim that the company is putting its users at risk and will eventually cause large losses through fraudulent business practices. According to a user on Twitter identified with the nickname ‘Bitfinex’ed’:

“Before anyone tells me that Tether is real money … let me direct you to Tether’s own website so that people will be clear”

And mark in to point 3 of the legal section of the Tether website:

“There is no contractual right or other right or legal claim against us to exchange or exchange your Tethers for money. “We do not guarantee any Tethers exchange or exchange rights on our part for money.There is no guarantee against losses when you buy, market, sell or exchange Tethers.”

In addition, some worried users report large price differences compared to other exchanges, especially in the Bitfinex margin trading section. Those same users point out on Twitter their concern that the market is manipulated by large-scale movements of money within Bitfinex itself. As denoted the following comment through Twitter:

“$ 317 million was available for margin trading in Bitfinex the other day, I beat 3X but you have 1 billion to manipulate the market, if you do not believe that 20-40% of the volume in 24 hours in leverage is an anomaly, I think that we could leave it there.”

“This guy has understood it, when you realize that they are negotiating with funds, 500 million liquidity (or a few billion leveraged liquidity), they can put on their own.”

Obviously, the risk of magnifying the bad news is real. Consumers are concerned about their accounts and can offer risk assessments that rely more on anxiety than on actual analysis. However, many of the users have made public observations based on particular experiences as well as more comprehensive and more global analyzes.

The user Bitfinex’ed, for example, has an extensive article published in Medium in which he highlights the deep concerns that the association of Bitfinex / Tether implies. Another user on Twitter showed similar discomforts regarding price manipulation, saying the following:

“Bitfinex is the next MtGox, people are starting to panic, it’s becoming a big problem, that’s exactly how the MtGox collapse began, and then bang! They took off with millions in user funds https://twitter.com/matgroennebaek/status/931616210889961472”

Always trusting in the good intentions of Bitfinex, it would seem a good idea to make its internal operation clear, given the anxiety of users and the general public about the strange movements within Bitfinex.

Enric Martí

Enric Martí

Economy fan, hangued, hooked on crytocurrencies and junkie of audiovisual stuff...on rehab