U.S.-Based Customers Are Unable to Access Financing via Bitfinex’s Platform, and Will Be Barred From Providing Liquidity by November 9th

In light of Bitfinex’s barring of U.S. retail customers, Bitfinex states that “U.S. individuals holding Recovery Right Tokens (RRTs)… may, starting on October 27, 2017, sell all of their RRTs on the exchange.” Bitfinex’s recovery rights tokens were distributed to a group of “BFX token holders [who] have converted their BFX tokens to shares of iFinex.”

BFX tokens were issued to Bitfinex customers following a devastating hack that took place during August of 2016. The fall-out from the attack saw Bitfinex socialize losses by converting 36% of all customers’ holdings into BFX tokens – which were repaid through irregular and unannounced installments at the discretion of the exchange. Bitfinex states that “any RRTs remaining in the hands of U.S. individual verified customers after the November 9th deadline may be sold through Bitfinex on an OTC basis through special arrangement with us.”

Bitfinex has come under increasing scrutiny in recent months for the sharp increase in the number of ‘Tether’, or ‘USDT’, tokens that have been issued. Following Wells Fargo’s suspension of U.S. dollar wire transfers processing services on behalf of Taiwanese banks servicing Bitfinex, speculations have surfaced that the exchange may have used ‘Tether’ as a means to circumvent liquidity problems – with the number of USDT tokens in circulation having increased by approximately 500% since Bitfinex’s banking issues began.