About

Bitfinex is a centralized cryptocurrency exchange operated by iFinex Inc. that allows users to trade more than 120 tokens and five fiat currencies (US Dollar, Euro, Pound Sterling, Japanese Yen, and Chinese Yuan) via spot, margin, and derivative trading using a web browser, or mobile device (iOS or Android).

History

Bitfinex was founded in Hong Kong in 2012 by Raphael Nicolle as a peer-to-peer Bitcoin exchange. Nicolle’s LinkedIn states he stopped working at Bitfinex in May 2015. Giancarlo Devasini (CFO at Bitfinex) joined Bitfinex in 2013 after meeting Nicolle in late 2012. Jean-Louis van der Velde (CEO of Bitfinex) also joined Bitfinex in January 2013.

Bitfinex is operated by iFinex Inc., registered in the British Virgin Islands, of which Unus Sed Leo Limited is a subsidiary. Bitfinex allows users to trade more than 120 tokens via spot, margin, and derivative trading. The Bitfinex platform allows users to lend, borrow, and stake supported cryptocurrency tokens and fiat currency.

In 2018, Bitfinex, facing an alleged $850.00 million loss due to Crypto Capital's actions, secured a line of credit from Tether. This loan was scrutinized by the New York State Attorney General (NYAG) since Tether's reserves, believed to fully back USDT, were used. In April 2019, the NYAG revealed conflicting transactions between Bitfinex and Tether in an alleged attempt to cover the loss. By 2021, Bitfinex claimed that it had repaid the loan; however, the NYAG found that Bitfinex and Tether made additional false statements to conceal the losses, ultimately leading to financial arrangements between the two to cover the losses. Tether and Bitfinex settled with the NYAG in February of 2021, agreeing to pay an $18.50 million fine, ceasing trading activity with residents of New York (United States), and implementing “a number of steps to increase transparency.” Of note, a Tether blog post states, “Under the terms of the settlement, we admit no wrongdoing.”

In May 2019, Bitfinex released the UNUS SED LEO whitepaper and raised $1.00 billion, offering UNUS SED LEO as an ERC-20 and EOS token. Both tokens were launched on May 21, 2019. According to pg. 14 of the UNUS SED LEO whitepaper, the Bitfinex team intends to programmatically buy back LEO tokens from the market “until no tokens are in commercial circulation.”

Other notable events in the history of Bitfinex include:

• August 2016 - Bitfinex suffers a hack and theft of 119,756 BTC.
• October 2016 - Bitfinex launches its Over-the-Counter (OTC) trading desk.
• March 2019 - Bitfinex introduces USDT trading pairs for BTC and ETH.
• February 2021 - Bitfinex settles a fraud investigation with the New York Attorney General, paying an $18.50 million fine, ending all trading activity in New York state, and implementing several new compliance measures.
• February 2022 - The United States Department of Justice announces it has recovered ~94,000 BTC from the August 2016 hack, or ~$3.6 billion during the seizure.

The Unus Sed Leo whitepaper (pgs. 8-10) mentions a number of additional products that are either no longer controlled by Bitfinex, inactive, or never launched, including:

• Ethfinex Trustless - an exchange developed by Bitfinex, which, in August 2019, became independent from Bitfinex, rebranded to DeversiFi, and pivoted to offering a decentralized exchange. DeversiFi operates as Rhino.fi. Additionally, Ethfinex offered the Nectar Token (NEC), a governance token for DeversiFi delisted by Bitfinex on May 10, 2021.
• EOSfinex - a decentralized exchange on EOS originally controlled by the Bitfinex team. On April 2, 2021, EOSfinex became open-source.
• Betfinex - an intended but never launched betting platform.

Additionally, the Bitfinex team intends to launch Honey, an application for traders to enhance and customize the functionality of the Bitfinex platform, including running algorithmic orders. Prospective users can request early access by submitting an email address and Bitfinex username. Of note, instructions for running algorithmic orders using the open-source Honey Framework launched in 2018 can be seen here.