Is bitfinex the next Mtgox scam?
Over the last few weeks there had been a lot of problems with deposits and withdrawals. There are over 1000 tickets submitted where people are stating their deposit is not credited. There are people who are waiting for their 30+ bitcoin for over a month without a response.
It had all started with people reporting that there are over 30 million USD worth of USDT produced out of thin air.
USDT (or Tether) is the dollar-backed crypto currency where the founders promised that each and every one of the USDT created, they'll put in a dollar in their bank.
You can actually see the reserve of USDT's compared to the reserve of USD. If the amount of dollars goes below the amount of tethers the reserve shows (-) balance.
Before the chaos in bitfinex, users in bitcointalk forums and in reddit have spotted that USD balance on tether accounts had gone down to -$30M.
It took tether administrators weeks to acknowledge this discrepancy and they have stated that it was a hack.
After the alleged hack, we have seen weird movement of the funds. Some reddit user had proved that movement was related to bitfinex and he proved all of the ties with different exchanges:
Guess who controls over half a billion Tethers across 3 exchanges—over 73% of USDT currently in circulation.
After all of these accusations people started to take their coins out of Bitfinex. That is when all the shit hit the fan.
Is Bitfinex actually pulling off a scam?
It had all started with people reporting that there are over 30 million USD worth of USDT produced out of thin air.
USDT (or Tether) is the dollar-backed crypto currency where the founders promised that each and every one of the USDT created, they'll put in a dollar in their bank.
You can actually see the reserve of USDT's compared to the reserve of USD. If the amount of dollars goes below the amount of tethers the reserve shows (-) balance.
Before the chaos in bitfinex, users in bitcointalk forums and in reddit have spotted that USD balance on tether accounts had gone down to -$30M.
It took tether administrators weeks to acknowledge this discrepancy and they have stated that it was a hack.
After the alleged hack, we have seen weird movement of the funds. Some reddit user had proved that movement was related to bitfinex and he proved all of the ties with different exchanges:
Guess who controls over half a billion Tethers across 3 exchanges—over 73% of USDT currently in circulation.
After all of these accusations people started to take their coins out of Bitfinex. That is when all the shit hit the fan.
Thousands of transactions are stuck!
There are people waiting for 30+ bitcoins to be sent not only that, there are MISSING transactions:
Bitfinex increased the minimum withdraw amount on many of the coins including bitcoin, ethereum and litecoin.
As I have seen this increase in minimum withdrawal I felt like something was up, I have transferred all of my coins to ethereum and tried to withdraw. I was optimistic back then, I knew it could be slow including all the cryptokitty mania but the next they I woke up I had no ethereum in my wallet.
I went back to bitfinex, and of course, it was stuck!
Luckily I was able to cancel the transaction and started to look for an option. In the forums there were reports of people being able to withdraw ripple instantly. Despite all of the complaints on missing coins I transferred all of my money to ripple (~$0.2 each) and executed a 25 (minimum) ripple withdrawal.
Although poloniex has some hiccups about XRP deposits, it deposited after a couple of hours. Then I executed to withdraw all of my coins in XRP which also went through instantly.
I do believe these seemingly temporary problems in bitfinex played a role of increase in LTC and then the increase in XRP.
Not until yesterday, we have tried to withdraw my girlfriend's bitcoins and in fact it was also an automated withdrawal which was approved instantly.
What about the others?
The user in the screenshot above actually received their 33 bitcoins yesterday. But there are still stuck transactions which have to be executed manually. You can try writing to the reddit.com/bitfinex post where the user u/social_bfx is helping people's transactions to push through.
The problem is, the people who had "missing ripple withdraws/deposits" are STILL DID NOT RECEIVE those ripples. Although the current withdrawals are fine I do not know how bitfinex is going to resolve this problem and how it'll affect the community.
Do not deposit!
A little research reveals that there are still problems with the deposits and almost all of the deposits needs to be processed manually. It is not wise to deposit right now. In fact it is not wise to use bitfinex altogether.
Stay clear of Bitfinex.
There is no proof that there is anything fishy. They have made no statements on the USDT laundering accusations. We do not know how the depositing issues going to unfold.
Right now, most wise decision is to not use any of the bitfinex services and withdraw all of your money while you can.
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