A lot of things are happening in the world of cryptocurrency as we speak. Some of these developments may not be overly positive in the long run. For several months now, Bitfinex has been a big question mark. Not only are they dominating the Bitcoin trading volume, but there are also allegations regarding wash trading. At this rate, some people fear Bitfinex may turn into the next Mt. Gox. That is the last thing anyone wants to see right now.
It is evident there are some weird things happening over at Bitfinex. While still a somewhat reputable exchange, some recent incidents raise a lot of questions. Ever since the company was hacked a year and a half ago, things have never been the same again. While that can also be a good thing, the number of concerns over Bitfinex is certainly growing. A few days ago, the first reports regarding withdrawal issues started hitting social media.
Should we be Concerned About Bitfinex?
That is not the biggest concern right now, though. A lot of people think Bitfinex is guilty of wash trading with several million dollars worth of funds. Leveraging this liquidity may even put it well above the $1bn mark. At this rate, there is a strong indication this particular exchange is setting the Bitcoin price. It draws eerie similarities with how Mt. Gox jacked up the price and then collapsed. While these claims are all worrisome, there is no real proof of this happening. Nor would there be if it were true, though.
This guy gets it. When you then also factor in that they are wash trading with the funds, 500M liquidity (or a few billion leveraged liquidity), they can pretty much decide the price all on their own.
— Mathias 'I told you so' Grønnebæk (@MatGroennebaek) November 17, 2017
Additionally, Bitfinex decided to leave the US market not too long ago. This sudden decision took a lot of people by surprise. It may very well be another warning sign of what is yet to come, for all we know. Then again, there is no reason to think this is done to hide malicious activity. US Regulators have scrutinized cryptocurrency for some time now, that much is evident. There shouldn’t be any reason to think this exchange will collapse like Mt. Gox did. Yet one cannot deny the unusual aspects of this platform are present for everyone to see.
As is always the case with stories like these, speculation is running rampant. A lot of people are concerned about exchanges possibly collapsing. That is a good thing, as we have seen too many of those issues in the past. People need to learn to move money off exchanges as soon as possible. If they go down and your money with it, funds will be lost. Rest assured we will see some more discussions regarding Bitfinex in the coming months. All we can hope for is none of this being true. Unfortunately, that’s hard to say for certain at this point in time.