Bitfinex suspends deposits, and frequent problems cause investors to worry

An announcement by Bitfinex, one of the world’s largest bitcoin exchanges, has sparked fears of another Mt Gox.

Bitfinex, the bitcoin exchange with the largest dollar trading volume in recent weeks, revealed today that it will no longer accept wire transfers starting tomorrow, following delays in dollar withdrawals last week.

The exchange said in a statement today:

“Starting April 18th, all wire transfers to Bitfinex will be rejected by our Taiwanese banks. This applies to all current fiat currencies.”

It’s worth noting that Bitfinex did not provide any details on why the bank did not accept the wire transfers (the wire dispute began earlier this month, and Bitfinex ultimately decided to sue the judgment, but withdrew the lawsuit a week later).

Bitfinex said it is currently working on a solution to the banking issue, which has also attracted considerable attention from market observers.

Jacob Eliosoff, manager of a cryptocurrency fund, said:

“It’s very fluid, and many of us remember the days of Mt Gox, where the fiat withdrawal issue came first and investors had to convert their fiat into Bitcoin so they could withdraw their money. In other words, they bought Bitcoin, which drove up the price on the exchange.”

Eliosoff even pointed out that some market observers might see this as an arbitrage opportunity, selling the coins at a high price and buying them back at a low price.

Amplify exchange spreads

As a result of these developments, the price differential between BTC on Bitfinex and other platforms has widened, even exceeding nearly $50.

At 18:55 UTC, the price of Bitcoin on Bitfinex was around $ 1,235 , compared to $ 1,185 on Bitstamp and $ 1,190 on GDAX.

This abnormal price difference inevitably reminds people of the last day before the Mt Gox incident, when the Bitcoin exchange rate on this exchange was also significantly higher than its competitors, ranging from 10% to 26%.

While analysts have expressed their concerns, they remain optimistic that Bitfinex will be able to recover from the situation.

Bitfinex suffered a near-destructive blow in August last year when it lost nearly $6,500 in customer funds, but later avoided bankruptcy by issuing new tokens, a system that later won praise from supporters as a creative approach.

Charles Hayter, founder and CEO of CryptoCompare, offered a similar sentiment, stressing that Bitfinex has a “reliable” reputation. “Hopefully they will handle this in a timely and professional manner,” he said.