Bitcoin exchange Bitfinex suspends wire transfers in a case similar to Mt. Gox

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The world’s largest bitcoin exchange Bitfinex (BTXNA Inc.) has suspended the acceptance of all incoming and outgoing wire transfers in a sign that the company may be in trouble.

Bitfinex made the announcement Monday, saying in a blog post that beginning April 18, all incoming wire transfers will be refused by the company’s Taiwan bank and that the decision applied to all fiat currencies at the present time. “We continue to work on alternative solutions for customers that wish to either deposit or withdraw in fiat, and are making progress in this regard,” the company added. “We will continue to update our customers as and when we have more information to share.”

News that Bitfinex was having difficulty with wire transfers first emerged earlier this month when the company said it was suing Wells Fargo & Co. and Wells Fargo N.A. after the bank decided to block all incoming wire transfers from Bitfinex made on its behalf. Nearly as quickly as it made the announcement, it then decided to withdraw the lawsuit, a move that was wise given that the company itself had no direct relationship with Wells Fargo and hence no solid ground on which to sue it.

Whether the decision to suspend all wire transfers is related to their banking issues is not clear, but some suggest that the suspension of wire transfers is an ominous sign for Bitfinex. The same banking issues with Wells Fargo occurred with Mt. Gox prior to the company’s declaring bankruptcy in 2014.

The similarities don’t end there. Mt. Gox, like Bitfinex, also claimed to have been hacked, although in Mt. Gox’s case the theft of bitcoin was later attributed to an inside job. Bitfinex claimed it was hacked last August to the sum of 119,756 bitcoin, which at the time was valued at $65.6 million but today is worth $145 million.

Of course, all of this is speculation, but with former Mt. Gox Chief Executive Officer Mark Karpeles even commenting on the situation, suggesting that other banks are likely to join Wells Fargo in blocking wire transfers, it doesn’t look good for the Hong Kong-registered company going forward.

Picture: GregL/Wikimedia Commons