- Bitfinex appears to be banking with Hong Kong-based Bank of Communications through a private account of PROSPERITY REVENUE MERCHANDISING LIMITED
- U.S. based Citibank acts as the intermediary bank
Recently, Bitfinex briefly banked with HSBC through a private account via Global Trading Solutions, and subsequently suspended all fiat deposits for nearly a week. Now, according to a source familiar with the matter, Bitfinex appears to be banking with Bank of Communications through a private account of PROSPERITY REVENUE MERCHANDISING LIMITED. The Hong Kong-based bank, which is partially owned by HSBC Holdings, has been using Citibank as the intermediary bank for U.S. dollar wire transfers to Bitfinex.
The current setup is very similar to a 2017 arrangement in which Wells Fargo acted as a correspondent bank for Bitfinex’s Taiwan-based banks. Eventually, Wells Fargo refused to process wire transfers in U.S. dollars, which sent Bitfinex on a long journey to find reliable banking partnerships.
It is speculated that HSBC was not aware that it was providing banking for Bitfinex and therefore abruptly closed the previous account. It is not immediately clear whether Citibank is aware that it is processing wire transfers for Bitfinex.
This morning, Bitfinex announced a “new, improved and increasingly resilient fiat depositing system for sending fiat currencies to Bitfinex.” The new deposit process involves applying for a deposit request after which the account is reviewed. If approved, the user can initiate the deposit based on the banking information that is revealed.
Bitfinex says on its site that its banking information is “commercially sensitive and confidential” and is being provided “for purposes of contributing good faith funding.” Bitfinex warns that sharing banking details “could damage not just yourself and Bitfinex, but the entire digital token ecosystem” and adds that “there may be serious negative effects associated with this information becoming public.”
This morning, The Block exclusively reported that Tether is holding its USD reserves at Bahamas-based Deltec Bank, which seemed to have calmed the markets as Tether is now trading at $0.96 on Kraken.
The Block has reached out to Bitfinex’s media representatives and will update this post if they respond.