Bitfinex just announced that it is immediatly curtailing the services provided to U.S. customers and within 90 days will no longer serve the U.S. market. Their official announcement puts it plainly:
“Over the next 90 days, we will be discontinuing services to our existing U.S. individual customers.”
At press time, Bitfinex had the highest volume on the USD/BTC trading pair of any exchange.
The reasons
The exchange lists several reasons behind their decision to no longer do business with U.S. customers:
While we have been able to normalize banking for some corporate customers and individuals in certain jurisdictions, compliant banking solutions for U.S. individuals remain elusive. We have been slowly and selectively inviting users in particular jurisdictions who meet set criteria to start using banking channels that have come online. This process is ongoing.
A surprisingly small percentage of our revenues come from verified U.S. individual accounts while a dramatically outsized portion of our resources goes into servicing the needs of U.S. individuals, including support, legal and regulatory.
We anticipate the regulatory landscape to become even more challenging in the future.
Bitfinex is not based in the United States. Exchanges based in the U.S. are better positioned to properly service retail U.S. customers.
Some changes effective immediately, others gradual
Bitfinex is immediately forbidding U.S. customers from trading Ethereum-based ICO tokens such as EOS and SAN. The exchange is also immediately suspending verification of U.S. accounts.
The exchange intends to gradually reduce the services available to U.S. customers. The announcement reads:
“We will be communicating further with affected users on timing and specifics. Our intention is to reduce disruption as much as possible for our U.S. customers.”
Under fire
This announcement comes as Bitfinex is under fire for its banking problems and its failure to disclose information about a financial audit that the exchange insists is presently underway. Recently, a great deal of suspicious activity has taken place on the Bitfinex exchange. In particular, it seems to be the preferred exchange of “Spoofy,” the mysterious and wealthy trader who has been exercising tremendous influence over the markets. Spoofy has become notorious for “spoofing” and “wash trading” in an effort to convince other traders either to buy or sell.
Not alone
Poloniex also recently announced sudden changes to its Terms of Use. They emphasized that their exchange does not deal with real money, only tokens, and they banned users of two U.S. states due to regulatory issues.