Bitfinex.com Review 2020 – Scam or Not?
Hong Kong-based Bitfinex is providing advanced trading services for anyone who wishes to exchange and trade cryptocurrencies. Being a leading liquidity and volume provider the market, Bitfinex offers margin trading up to 3.3x leverage and OTC trading options for private traders.
Bitfinex is a Hong Kong-based trading platform that provides advanced services for cryptocurrency traders. The company behind Bitfinex is iFinex Inc, a corporation registered in the British Virgin Island with headquarter in Hong Kong.
The exchange was founded in 2012 by Raphael Nicolle. Nicolle started his career as th IT specialist in Paris where he got involved in bitcoin trading. He soon realized the opportunities laying in the developing cryptocurrency market, so he decided to start Bitfinex as a one man company offering bitcoin trading and lending options. He has been the CTO and lead developer of the platform until 2015 when he handed over his role to Paolo Ardoino who also holds this position at the moment. Bitfinex’s CEO is Jean-Louis van der Velde who has over 30 years of experience in the tech industry. Originally from the Netherlands, Jean Louis has transitioned to Asia and has been leading the exchange since early 2013 from Hong Kong. Jean Louis is also the CEO of Tether.
Originally, Bitfinex started its business in 2012 as a peer-to-peer cryptocurrency exchange platform with offering P2P margin lending opportunity for traders of bitcoin and other altcoins. Later on, they switch to a centralized trading engine. Bitfinex is also associated with Tether cryptocurrency, one of the first and popular stablecoins which are pegged to the US dollar.
Tether and Bitfinex share common shareholders and management. By design, Tether is set to worth 1 USD and maintaining an equivalent amount of reserves for each Tether coin issued. Since 2018, from time to time rumors are arising about the lack of sufficient reserves and possible market manipulation involved in the bitcoin price in relation to the issuance of Tether coins. Up to now audits confirmed the legal basis of the company’s business activities.
The company’s primary focus was on the US market originally, however since 2018 August they have stopped offering services to US clients due to the changing regulatory environment. Restrictions only applicable to US residents, using the platform from the United States is still permitted. By that time Bitfinex has expanded its business to worldwide clients, servicing almost all countries globally.
Bitfinex is actively present on major social media platforms. On Twitter @bitfinex you can follow all major updates and announcements impacting the platform. Their 18k followers are also notified on Facebook about system related information. The company also has a Linkedin profile. On the official Telegram channel, the admins help to answer general questions about the platform, trading and compliance procedures. On Bitfinex’s blog, you can read about interesting stories, listing news, and guides.
- Bitfinex.com Trading Analysis
- Ease of Use
- Customer Support
- User Experience
- BitFinex Security
- Supported Payment Methods
- Supported Countries
You can start trading on Bitfinex without going through the verification process, however, in order to trade fiat currencies for Bitcoin or to trade with stablecoins, ID verification is needed. Depending on the account type (individual or corporate), the exchange can require additional documents.
Besides personal details, ID verification and proof of residence the Bitfinex verification process also requires a bank statement and a signed statement confirming the validity of documents and information provided. Verification time can take up to 1-2 weeks, mainly depending on the interest.
There are no limits when it comes to trading.
Currently, Bitfinex accepts only US dollars from fiat currencies but offers trading and withdrawal option in USD, EUR, GBP, JPY.
In terms of cryptocurrencies, there are several altcoins you can choose from. They also accept stablecoins like Tether. In total, 164 cryptocurrencies are available at the moment for trading on Bitfinex.
Here is the complete list of altcoins available on Bitfinex:
Bitcoin, Litecoin, Ethereum, Ethereum Classic, Zcash, Monero, Dash, Ripple, Iota, EOS, Santiment, OmiseGO, NEO, ETP, Qtum, Aventus, Eidoo, Bitcoin Gold, Streamr, QASH, YOYOW, Golem, Status, Basic Attention Token, Decentraland, FunFair, 0x, Time New Bank, SpankChain, TRON, RCN, iExec, AidCoin, SingularDTV, Augur, aelf, Ethfinex Nectar Token, IOSToken, Aion, Request Network, Raiden, Loopring, WAX, Dai Stablecoin, Cofound.it, SingularityNET, BnkToTheFuture, Medicalchain, Odem, Aragon, Dether, Mithril, Storj, Stellar Lumen, Verge, BitcoinInterest, Maker, VeChain, Kyber, POA Network (erc20), Ethfinex Voting Token, Lympo, UTRUST, BLOCKv, DADI, ORS, Auctus, Polymath, Fusion, CommerceBlock, 0Chain, Consensus AI, Nucleus Vision, Cindicator, Cortex, PAI Project, Seer, Essentia, Atidium, ADD, MEET.ONE, Atonomi, Hydro Protocol, Data, Everipedia, WePower, Zilliqa, Bancor, The Abyss, Xriba, Matrix, Banyan Network, Autonio, Digix Gold Token, VeChain, Universa, TokenCard, ParkinGO, Tezos, Content Neutrality Network, ContentBox, MobileGo, Rate3, Yggdrash, Melon, Walton, Credits, Omni, Internet Node Token, Dragonchain, Kleros, Digibyte, Bitcoin SV, Bitcoin Cash, WLO, Vetri, Enjin, On.Live, RBTC, GUSD, USDc, TrueUSD, Paxos, RIF, Blockpass, V-SYSTEMS, BitTorrent, Callisto, Ether Kingdoms, Data Transaction Token, Gnosis, DAOstack, Cosmos-Atom, Wrapped Bitcoin, CryptoFranc, EURS, LiquidBTC, Unus Sed LEO, Unus Sed LEO (EOS), Unus Sed LEO (ERC20), AirSwap, FOAM, Upfiring, ZB Token, OKB, USDk, Gate.IO, BitKan, Ampleforth, Algorand, Swarm, Tripio, Loom, Dusk Network, Ultra, RenrenBit, eosfinex token, DragonToken, FTX.com, socios.com Chiliz, LNX, TetherUSD (Omni), TetherUSE (Ethereum ERC20), TetherEUE (Ethereum ERC20)
In case of fiat deposits and withdrawals, a minimum of 10000 USD/EUR/GBP and 1M JPY is set.
Wire transfers are available for 0.1 percent of the amount, with a minimum fee of 60 dollars.
Bitfinex fee structure is a bit different from the average applying a maker-taker fee model., The maker trader is adding liquidity to the exchange ecology, and a taker is the one who removes it.
Trading fees start at 0.1 percent for the maker and 0.2 for the taker. The first decline in fees is at 500,000 dollars traded, which is a pretty high amount compared to the other exchanges. As the monthly trading volume rises, the fees steadily decline. The final point, with 30 million dollars or more traded, is 0 percent fee for the maker and 0.055 percent for the taker.
Bifinex charges an extra fee for small deposits which are less than 1000 USD value for all altcoins. Crypto deposits above 1000 USD are free of charge. Crypto withdrawals are free for EOS, NEO, XLM, and some smaller tokens, otherwise, you need to pay a small transaction fee to process your withdrawals.
Wire transfers cost 0.1 percent of the amount, with a minimum of 60 dollars for both deposits and withdrawals. Express bank wire transfers which are processed within 24 hours on business days cost 1 percent of the sum with a minimum fee of 60 dollars.
The exchange also charges margin funding fees. The charge on fee collected by Margin Funding Providers is 15 percent of the fees generated by active margin funding contracts. For those who are opened by a hidden offer the cost is a bit higher and totals for 18 percent.
Bitfinex.com Trading Analysis
The trading platform is very sophisticated, and it offers a lot of trading options. The offered types of orders include usual common order and also some advanced order types. Here is the list of order types offered on Bitfinex:
- Trailing stop
- Fill or kill
- One cancels other (OCO)
- Hidden order
- Post-only limit order
Due to the high volume of trades and good liquidity, bid/ask and order count is resolved in real time, allowing users to choose the best time to place an order.
The exchange also offers margin trading with 3 to 1 leverage, meaning that the user has to have at least 30 percent of the sum borrowed in their account.
The margin trading is supported by margin loans. The margin loans are granted through a lending market. Basically, the user can choose to lend the capital needed by margin traders. In return, lenders receive a daily interest rate on the Bitfinex platform. This type of arrangement is called Swap.
For more info check Bitfinex FAQ section, it has all the answers under the trading section.
Ease of Use
Bitfinex user interface is fantastic. The platform offers quick options to buy or sell digital currencies as well as to place orders.
The website is mobile-friendly and responsive. It’s fast, and real-time trading is possible. Mobile apps are also available for Android and iOS, offering trading, wallet and margin funding options. You can customize your experience to set up and secure your account with API keys and PIN pass protection. The mobile apps also help you to stay on track on your trading by offering notifications on trade executions and price alerts.
Support is available 24/7 via email and Telegram chat. Emails are typically answered within 12 hours, but in some cases, it can take longer. In addition, there’s an official forum where users can ask for help and a limited FAQ page that doesn’t cover all required information. On their Telegram channel, Bitfinex’s admin team answers general questions about the trading interface, trading in general and compliance-related questions. However, any account-specific information must go through the official ticket system within the platform to avoid security issues. Be aware that Bitfinex never approaches its users through private messages and you should never share your password with anyone asking for it as it is a common scam that has been emerging on the market.
The Bitfinex support team used to have a reputation for being extremely unprofessional and rude – but some users claim it’s mostly due to one person who started the operations. Since the early days, Bitfinex support team has grown significantly and trying to get back customer’s trust.
There are numerous user complaints online about Bitfinex, but they are mostly related to the hacking incident and the support unprofessionalism. We haven’t found any complaints about trading or funding of the accounts, but we did found complaints about the performance issues Bitfinex has when it’s higher volatility of the currencies. The problems are so frequent and so serious that the exchange even got a new nickname – Glitchfinex. During the past year, Bitfinex spent a lot of money on improving its trading engine to avoid such glitches in the future.
The exchange claims that 99.5 percent of client funds are kept in cold storage, with other .5 percent stays in hot wallets to ensure needed liquidity. Their cold storage system has a multisig feature and is geographically distributed in multiple secure locations.
On the client side, they offer two-factor authentication for both logins and withdrawals. Adding an extra layer of security is possible with two-factor authentication using Google Authenticator, Twilio or other third party physcial security key offered by FIDO U2F. The exchange claims to have “advanced verification tools” to detect if the account has been compromised. Such tools include monitoring login activity for suspicious logins and IP addresses. Withdrawals are only allowed from usual IP addresses with extra confirmations in place.
The exchange does have SMS and email notifications, and also offer PGP encryption in email communication.
Despite the “strong” security, the exchange has been hacked multiple times. The first major hack happened in May of 2015 when a hacker was able to steal 1500 Bitcoins from their hot wallet. The exchange was easily able to reimburse the damaged users. But, in another attack in August 2016, reimbursement question became much more delicate as 120,000 BTC worth approximately 72 million dollars were stolen from the trading platform.
The company immediately issued BFX tokens which are meant to make up for the 36 percent losses of the customers after the incident. Bitfinex has already bought back a decent percentage ALL of their tokens.
Supported Payment Methods
Customers from all countries except USA, Cuba, Democratic People’s Republic of Korea (North Korea), the Government of Venezuela, Iran, Pakistan, Syria or Crimea are allowed.
Bitfinex Review Conclusion
Despite its controversial connection to Tether and prior exchange hacks, Bitfinex has been on the market for a very long time and managed to recover its clients trust from time to time even after serious events. The high liquidity and advanced order types, along with the margin and lending option helps clients to fully take advantages of what cryptocurrency trading can offer.
- High USD liquidity
- Low fees
- Full package of order types, margin trading and lending market
- Paid back all the losses from the hack (!)
- Not a very transparent company
- Has been hacked multiple times
- Unclear situation with USDT (Tether)
Do you have good or bad experiences with this Bitcoin Exchange? Please share them!Go to Bitfinex.com