Former Diar editor and head analyst at The Block, Larry Cermak tweeted on October 6 that the Bitfinex crypto exchange has established a new banking relationship with a $133 billion banking giant, HSBC. The exchange has separated from the Puerto Rico-based Noble International, its previous banking partner.
Larry Cermak mentioned in his tweet that the exchange is banking with HSBC through a private account of Global Trading Solutions. Owing to the nature of the private account, Larry stated that it is not very clear if the banking giant is aware that Bitfinex is banking with the firm. He also added that the extent of the relationship between the two firms is also not clear.
The Bitfinex crypto exchange’s banking relations are closely scrutinized owing to its close relation with stablecoin, Tether. Much of Tether’s volume is transacted with Bitfinex and the two entities share common investors and management.
In case the banking giant is aware of and supportive of the private account, this news of Bitfinex securing a major banking partner in HSBC would calm nerves in the crypto ecosystem. However, the news of certain currency deposit restrictions in place is likely to raise some concern among the crypto community, as reported on The Block.
Bitfinex, which is one of the oldest cryptocurrency exchanges, has faced some of the most difficult challenges that an exchange could face. This is mainly before major crypto markets such as South Korea, the U.S. and Japan offered clarity on cryptocurrency regulation. In April 2017, Bitfinex initiated a lawsuit against a U.S.-based banking giant, Wells Fargo, for blocking deposits to Bitfinex’s banking account and disrupting its business operations.
After that incident, the Bitfinex crypto exchange moved out of Taiwan and relocated to the Caribbean. The exchange partnered with Noble Bank in May to process transactions sent by its clients. However, Noble Bank announced to file for bankruptcy following an in-principle deal to restructure debt in January. With that, Bitfinex’s only banking partner, Noble Bank vanished, as reported on CCN.[The views and opinions expressed in this article are those of the authors and do not necessarily reflect the views and/or the official policy of the website. ]