Bitfinex, the 17th largest cryptocurrency exchange by trade volume, has announced a new fee structure for high volume / high value fiat withdrawals.
Bitfinex Hikes Fee
According to the announcement, effective immediately, Bitfinex will charge a 3.0% fee on all external wire withdrawal requests exceeding the following frequency and/or size limits:
- more than 2 fiat withdrawals in any thirty-day period; and/or,
- more than $1 million in aggregate in fiat withdrawals in any thirty-day period.
This is a significant increase. A customer who withdraws $1 million, for example, would have to shell out $30,000 in fees.
The exchange, however, said that the move would not impact 99% of the customers who make regular withdrawals.
Intent Behind Move
Bitfinex did not specify the reason behind the move. Usually, with growing competition, exchanges lower their fees to retain existing customers and attract new ones.
The trading platform claims that it serves as the primary fiat gateway and has processed over 700 withdrawals amounting to more than $1 billion in October.
Bitfinex and Tether (USDT), who share the same management, have recently been in the news for all the wrong reasons. Both firms have been accused of unethical practices and questionable integrity.
Last month both entities had to terminate the relationship with their banking partner, Puerto Rico-based Noble, due to liquidity issues with the bank.
This was followed by rumors of Tether’s delisting from multiple exchanges, leading to a sell-off of USDT.
A possible reason for the move could be to stem the outflow of funds from the controversy-ridden platform and discourage customers from exiting.
The customers of the platform and the members of the crypto-community obviously did not receive the announcement well and took to social media to vent out their feelings.
Many have accused the exchange of deliberately locking up customer funds. Conspiracy theories making the rounds say that the move is aimed at raising the value of Tether. Customers willing to withdraw funds from the exchange could, in theory, resort to exiting by converting to USDT because fiat withdrawals have become expensive.
Speaking about the recent concerns, Bitfinex stated:
Our banking remains stable, but we must prioritize our long-standing and loyal customers using the platform so that they can continue to benefit from our truly unique offering, the benefits of which extend far beyond our users and include many crypto-to-crypto and crypto-to-stablecoins exchanges.
The exchange added:
We will continue to fight to defend the use of an independent fiat gateway despite sustained and co-ordinated attacks from powerful forces attempting to harm global cryptocurrency markets. We are thankful for the support that many of our customers and others have shown us behind the scenes. Now it is important that we all remain united and support our industry beyond any cryptocurrency or individual exchange preference.
This announcement by Bitfinex has not gone down well with the users and may prove counterproductive for the already issue-struck company.
What are your thoughts about the fee increase by Bitfinex? Let us know in the comments below.
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