On Saturday 6th October, the Block, through its lead analyst Larry Clement, announced Bitfinex’s success in obtaining a partnership with HBSC, a London-based banking giant with a net worth of approximately $133 billion. The report indicated that Bitfinex would be banking with HSBC via a private account at Global Trading Solutions. Clement also complimented the move by Bitfinex describing it as “a very good fit”
“Bitfinex is now banking with HSBC through a private account at Global Trading Solutions. A very good fit if you ask me. It’s also worth mentioning that all EUR, JPY, and GBP deposits are paused, but Bitfinex expects the situation to normalize within a week” Larry explained.
As history can attest, Bitfinex has had its fair share of challenges in the crypto-market world. Being one of the oldest exchanges in the crypto market, Bitfinex has endured some of the most traumatizing challenges in the market, most of which the current exchanges might not have survived. This was so, especially before major crypto markets across the globe, such as the U.S., Japan, and South Korea established clear-cut regulations on cryptocurrencies.
In the first quarter of 2017, Bitfinex was forced to file a major lawsuit against the American-based banking institution Wells Fargo for apparently blocking deposits to Bitfinex accounts thus disrupting its business operations.
“The decision to initiate legal action is because we cannot allow precedents in this industry where clearinghouses can disrupt businesses that are by all metrics complying with the rules in place.” Stated Bitfinex.
Bitfinex has also had a fair share of rankles with Taiwanese banks, forcing it to relocate to the Caribbean, where it reportedly partnered with Noble Bank for processing transactions from clients. This did not last as the bank soon after filed for bankruptcy following an in-principle deal to restructure debt. As such, the bank seized operationally.
Is the move healthy for both Bitfinex and HSBC?
Efforts to reach the management of Bitfinex on the above proved futile. However, the director of communications at Bitfinex, Kasper Rasmussen, reiterated the firm’s stand of none-comment on potential or actual business relationships. “Bitfinex does not and has never commented on actual or potential business relationships and this is not subject to change now,” he said
However, given the current trends, reliable exchanges are being given banking services by major financial institutions and if the same can be sustained with Bitfinex in the long run, then the stability of the crypto market is guaranteed.