Dumped! HSBC Cuts Ties With Bitfinex

Dumped! HSBC Cuts Ties With Bitfinex

HSBC has dumped Bitfinex unceremoniously after learning the company it thought it had established a banking relationship with, Global Trading Solutions, was affiliated with Bitfinex and doing its banking on the controversial exchange’s behalf.

Explaining the Fiat Deposit Problems

In anticipation of the potential collapse of Puerto Rico-based Noble Bank International, Bitfinex took its banking business elsewhere. It was believed at the time to have found a new home with HSBC. Many saw the banking change as being behind the sudden problem with fiat deposits with Bitfinex.

Yet as recently as yesterday the company issued another announcement in relation to fiat deposits, adding a further layer of complication to sending money to the exchange:

It is believed that HSBC learned of the relationship between Global Trading Solutions and Bitfinex and ditched the account, making accepting fiat once again a challenge for the embattled company.

Bitfinex Not Bitfinex’ed… Yet

Bitfinex remains operational but without the ability to accept fiat deposits and with a banking solution that remains in flux. As per an October 11th tweet, fiat on ramping remained problematic and the relationship with HSBC already facing challenges:

Flight From Tether, Banking Woes Continue

On October 15th, Bitsonline reported a plunge in Tether–supposedly backed 1:1 by USD–to as low as 87 cents as concerns mounted about the exchange’s solvency and the remaining uncertainty surrounding its as-yet-unaudited bank accounts. Tether has since recovered to 96 cents, at press time, according to Coinbillboard. But 96 cents is still four percent shy of full value for the so-called stablecoin. (And there is now no known bank account to audit.)

As its banking woes continue and uncertainty remains, faith in Bitfinex will only worsen. This is especially true when investors know that without an ability to seamlessly accept fiat, it will be difficult for the exchange to allow traders to cash out of their USDT positions for USD.

Have your say. Are the controversial exchange’s banking woes only going to continue after HSBC has cut ties with them?

Images via Pixabay

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