Most cryptocurrency enthusiasts will be well aware of the problems affecting the Bitfinex and Tether platforms. Due to Wells Fargo no longer processing transactions related to these services, there is a big problem in getting funds out. For now, the money resides in iFinex’s and Tether’s Taiwanese bank accounts, with no convenient way to move funds over to the US. Now it appears this issue affects other companies as well, including BTC-E and Xapo.
Wells Fargo Messes Up Crypto-related USD Withdrawals
Ever since Wells Fargo suddenly decided to no longer handle transactions from iFinex’s Taiwanese bank, there has been a lot of backlash over this decision. Since the bank didn’t even try to warn iFinex or Tether – who are also affected – about this change, both companies were thrown a curveball. Many angry letters between all parties did not result in a workable solution either.
iFinex had no other choice than to file a lawsuit against Wells Fargo, although that did not amount to much either. In fact, a week after filing the lawsuit, it was withdrawn without any further explanation. This created quite an uneasy feeling among users of the exchange, especially those looking to get their money out in the form of US Dollars.
What is even more disconcerting is how the exchange successfully redeemed all outstanding debts to its customers. After the exchange was hacked in 2016, they reduced user balances by a large amount to cover the losses. Instead, all users were issued an amount of BX tokens, representing the total amount of money owed. Bitfinex redeemed those tokens, four days after Wells Fargo stopped processing USD transfers on the parent company’s behalf. Once again, not a smart decision.
Now it appears iFinex and Tether are not the only companies affected by the Wells Fargo decision. BTC-E, one of the oldest bitcoin exchanges, has suspended USD withdrawals until the end of the month. The company is looking for a new banking partner but hopes to have everything resolved in the coming weeks. Xapo is also affected by this decision, although it is unclear what the company’s future plans are.
It is evident converting from cryptocurrency to fiat currency will always remain a challenge. Banks do not like bitcoin since it is a direct competitor to their own business model. Moreover, there is a pressing question as to whether or not Bitfinex is even remotely solvent at this stage, although there is no official evidence to prove otherwise. For now, this is a rather uneasy situation that raises more questions than answers.
Header image courtesy of Shutterstock