The USD Tether [USDT] saga continues to unfold along with exchange platform Bitfinex, as fiat deposits to their exchange are becoming increasingly arcane. While this is not an uncommon occurrence for the exchange, the platform has recently come under flak for multiple problems with the supposed ‘stable coin’.
The exchange platform is now banking with the Hong Kong-based Bank of Communications through a private account under the name of PROSPERITY REVENUE MERCHANDISING LIMITED, revealed a source to The Block.
The intermediary bank in the system is Citibank, and it is unclear whether the corporation is aware of the exchange banking with them. This harkens back to 2017, where the exchange had entered into an arrangement with Wells Fargo, which was the correspondent bank for Bitfinex’s banks in Taiwan.
The change comes after HSBC supposedly terminated relations with the exchange platform, as fiat deposits were temporarily paused over the last week. Speculation has since ensued that HSBC terminated the relationship with the platform.
The change has now resulted in a system that Bitfinex claims is “new, improved and increasingly resilient” method for depositing fiat currencies to the exchange. However, attempting to do so will require the user to hold $10000 worth of equities, along with going through an account review which may take up to 48 hours. Following this, the user is then given a deposit notification which specifies the bank details for that transaction.
However, the exchange platform warns its users before engaging in deposits, as seen in a screenshot posted on Twitter by WhalePanda. The warning stated:
“This banking information is commercially sensitive and confidential. You should be very careful with this information. You are asked to keep this information to yourself and to not share it except with your financial institution. Divulging this information could damage not just yourself and Bitfinex, but the entire digital token ecosystem. Accordingly, you are cautioned that there may be serious negative effects associated with this information becoming public.”
Moreover, the exchange platform seems to imply that the downfall of their fiat deposit system comes from their competitors, with their blog post stating:
“We believe this system to be significantly more durable in the face of sustained attacks by our competition and their supporters. Ongoing campaigns against us will only result in our company becoming stronger and better.”
This comes at a time when investor faith in the Tether stable coin is dwindling, with many users calling for a boycott of the coin. However, the coin still remains as the second most traded coin after Bitcoin, thus signaling a catastrophic decline for the market in case of its failure.
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