Bitfinex welcomes another coin with a 1:1 peg to Bitcoin

Let’s forget the controversy surrounding Bitfinex and look on the bright side. A Bitcoin sidechain, Liquid, developed by Blockstream has launched its …

Let’sforget the controversy surrounding Bitfinex and look on the brightside. A Bitcoin sidechain, Liquid, developed by Blockstream haslaunched its coin on Bitfinex.

DubbedLiquid Bitcoin (LBTC), the coin can now be deposited or withdrawn onBitfinex. The coin has a ratio of 1:1 with Bitcoin. The Liquidnetwork is controlled by institutions which include cryptocurrencyexchanges. The current members of the network include Tilde, Huobi,BTCTrader, DMM Bitcoin, among others.

According to Paolo Ardoino, CTO, Bitfinex:

“IssuingBitcoin, stablecoins, and various other digital assets under oneblockchain platform makes a lot of sense. It reduces the integrationburden for an exchange like ourselves, and traders can manage alltheir assets from a single wallet application.”

LBTCis Bitcoin on the Liquid network. As stated by Blockstream, Liquid is an inter-exchangesettlement platform that connects virtual currency exchanges andother institutions across the globe. This, in turn, facilitatesfaster BTC transactions plus the issuance of digital assets. Thespeed of Liquid proves beneficial for traders engaged in arbitrage.

Althoughthe chain was initially closed to a select few, it is slowly lettingthe general public to have a feel of the network using the Liquidclient.

Asnoted by Blockstream’s Mario Gibney, apart from allowing Liquidusers to send funds to other users without an intermediary,Blockstream is considering supporting “an easy-to-use-mobilewallet.”

Gibney added:

“Andas more exchanges integrate (as Bitfinex and the Rock Trading alreadyhave), then users will be able to deposit and withdraw from thoseexchanges within 2 minutes.”

TheLiquid network is a permissioned platform with 15 entities selectedto validate and commit transactions. While this may not be the bestapproach, once those using the platform build trust with thevalidators, it “would make transfers pretty much instant, and thuswould make arbitrage a lot faster.”

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Bitfinex Exchange Claims It Is Very Lucrative To Operate a Cryptocurrency Exchange

The controversial and popular cryptocurrency exchange Bitfinex claims that running a crypto exchange platform is very lucrative. According to the …

The controversial and popular cryptocurrency exchange Bitfinex claims that running a crypto exchange platform is very lucrative. According to the company, iFinex Inc. the company behind the exchange and the stablecoin Tether (USDT), they registered a profit of $404 million last year.

Bitfinex Claims Exchanges Are Very Profitable

In a recently released white paper, iFinex reported a $404 million profit in 2018 on $418.2 million in gross profit. At the same time, Bitfinex disclosed that it seeks to raise up to $1 billion through an Initial Exchange Offering (IEO). The intention is to be able to claim for $850 million that are frozen in bank accounts in Poland, Portugal, and the United States.

As reported by Bloomberg, New York’s attorney general has accused Bitfinex and Tether to cover-up $850 million in losses. This generated controversies in the market about the stability of the Tether stablecoin, the largest in the market.

Bitfinex has also announced that it is launching LEO, a digital currency that would allow users of the exchange to pay lower fees when they trade virtual currencies. Bitfinex will be using 95% of the recovered funds from government seizures to repurchase and also burn the tokens in one and a half year after the day of recovery.

The white paper explains that the firm has between 60 and 90 employees and that they registered expenses of $14 million just in 2018.

Bitfinex will have to work hard in order to recover the trust from clients, traders and the crypto market in general. Thus, this is expected to be a very difficult task for the company.

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Crypto Heresy: Question Blockstream on Twitter and You’ll Be Blocked

“Why are we not talking about Adam Back and Samson Mow, two of the most visible employees of Blockstream publicly siding with Bitfinex given that …

Crypto Twitter (CT) is a grueling battleground between digital currency enthusiasts, company executives, maximalists, journalists, lawyers, and so-called thought leaders and luminaries. For instance, on May 8, reporter Larry Cermak posted data concerning Blockstream and its sidechain project Liquid’s performance over the last seven months. After Cermak shared unbiased figures and queried an alleged conflict of interest, the Blockstream account instantly blocked the journalist.

Also read: Bitcoin’s Software Has Been Rolled Back Before

Liquid’s Lack of Traction Sparks Intense Crypto Twitter Debate

CT is a wonderful place so long as you toe the maximalist party line, sing kumbaya, and tell everyone how great BTC is on a daily basis. Because if you don’t repeat these values, you just might be designated persona non grata. This week on CT, the founding partner at Adamant Capital, Tuur Demeester, tweeted about Blockstream’s latest Liquid announcement and said the sidechain “could become a DTCC for Bitcoin.” In response, The Block analyst Larry Cermak shared data concerning Liquid’s overall performance in the last seven months.

“So far, in its 7-month history, Blockstream is barely gaining any traction,” Cermak replied. “Liquid has had 61,700 total transactions and is currently capitalized with $313,000 from the net value of less than 400 peg transactions.”

Crypto Heresy: Question Blockstream on Twitter and You'll Be Blocked

Demeester responded: “Let’s wait until tx fees on the main chain spike again.” The following day, after Cermak posted his tidbit of publicly available data, he found out he was blocked by the official Blockstream Twitter account. “This is pretty pathetic — Yesterday, I posted data that showed that Blockstream’s Liquid isn’t doing well (so far) after being live for 7 months,” Cermak tweeted. “Literally I just posted publicly available data and I got blocked by Blockstream’s official account.” Blockstream’s chief strategy officer, Samson Mow, claimed he was the one who blocked Cermak “because he’s a moron.”

Crypto Heresy: Question Blockstream on Twitter and You'll Be Blocked

Questioning a Conflict of Interest Apparently Makes a Reporter a Moron

So did Blockstream decide to block an analyst for posting data? Well according to Blockstream employees it was really because Cermak publicly asked if there was a conflict of interest between Blockstream, Adam Back, and Samson Mow sticking up for Bitfinex.

Crypto Heresy: Question Blockstream on Twitter and You'll Be Blocked

“Why are we not talking about Adam Back and Samson Mow, two of the most visible employees of Blockstream publicly siding with Bitfinex given that Bitfinex is an early investor in Blockstream?” asked Cermak. “The conflicts of interest in this space are something else” The Block analyst continued, adding:

What’s the issue with this, some are asking? — And at this point, it seems that the only people siding with Bitfinex and Tether are shareholders or somewhat involved.

Crypto Heresy: Question Blockstream on Twitter and You'll Be Blocked
Crypto Twitter rules are as follows: “All animals are equal but some animals are more equal than others.”

The Block’s Frank Chaparro asked why simply asking a question brought out all the pitchforks. Blockstream’s Adam Back replied that “It happens to be untrue, however, which I confirmed for another journalist who asked privately about the claim.” Back continued by stating: “Simply the quote ‘It’s because Bitfinex invested in Blockstream’ is untrue, and did not fact check. You don’t have to fact check, but stating as fact untrue allegations is not that cool.” Back seems to think Cermak should have asked people FUDing Bitfinex, and that his defending of Tether was simply him just refuting “publicly known FUD as a public service.”

Crypto Heresy: Question Blockstream on Twitter and You'll Be Blocked

The story continued as maximalists decided to harass The Block for accepting $25K in funding and allegedly not reporting on Coinbase objectively in an attempt to flip the story back on the publication. However, after defending the news outlet, The Block CEO Mike Dudas disclosed that the company would return the funds to Coinbase. Quite a few crypto supporters thought that Blockstream was wrong for getting upset with Cermak’s objective data and his valid question. After all, a good number of people on CT have already been questioning Blockstream’s seeming conflict of interest.

Crypto Heresy: Question Blockstream on Twitter and You'll Be Blocked

Moreover, the anonymous owner of, Cobra, detailed that he was also blocked by Blockstream for questioning them. He remarked that when Coinbase and Bitmain were catching flak from the community they never blocked people and he insisted that members of “Blockstream are delicate snowflakes.” Cobra is also known for questioning Blockstream when Back showed support for Halong Miners, a startup accused of simply buying Innosilicon miners and applying Halong stickers on them for resale.

The thought police on CT are starting to look no different than the pigs in the famous Orwell novel Animal Farm. The social media platform is filled with teenage angst, confirmation bias, and groupthink, and is no different to the archetypal high school groups that thrive on immaturity and bullying.

What do you think of the events on Twitter between The Block’s Larry Cermak and Blockstream? Let us know what you think about this subject in the comments section below.

Image credits: Shutterstock, Animal Farm, Twitter, and charts shared by The Block.

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Jamie Redman

Jamie Redman is a financial tech journalist living in Florida. Redman has been an active member of the cryptocurrency community since 2011. He has a passion for Bitcoin, open source code, and decentralized applications. Redman has written thousands of articles for about the disruptive protocols emerging today.

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Bitcoin enters another parabolic advance as Bitfinex premiums fall to 1.5%

Over the last week, we have seen a Bitfinex premium build and then drop from between 6% to its current 1.5%, meaning the price gap between itself …

Bitcoin has broken out again as it continues along its short-term parabolic advance to fully retrace the November 2018 capitulation event.

One piece of news that is acting as fuel to propel the current trajectory is that non-Tether backed exchanges have now closed the Bitcoin price gap to under $100 between them and Bitfinex, which is currently in the midst of a legal challenge from US authorities.

Bitcoin going parabolic again, after completing 100% up-move from it’s $3,100 (local) bottom from Bitcoin

Not the first Bitcoin correction

Since the project’s inception, price action for Bitcoin has seen 13 separate corrections of over 30% in price (in USD terms). The most recent of which took BTC price from a $20,000 top all the way down over 80% to settle at its most recent low of $3,100 in December 2018.

One common factor through all the ups and downs has been a pattern of higher highs and significantly higher lows for each of its subsequent corrections. Another key factor to note during the history of the now decade-old asset class is a growing list of HODLers.

This large and growing group of believers in an open-finance protocol have been battle-hardened through a cycle of various bull/bear markets to preserve their economic stake in a future ecosystem that they believe to be free, global, and open to all.

When time warp?

— Edward Morra (@edwardmorra_btc) May 10, 2019

Bitcoin’s latest parabolic rise is reminiscent of prior bull runs, as they too were filled largely with bad news and anxiety in the early stages of the trajectory.

Over the last week, we have seen a Bitfinex premium build and then drop from between 6% to its current 1.5%, meaning the price gap between itself and its rivals like BitMEX, Coinbase, and Gemini has fallen sharply. To add to this ongoing legal and proof of reserve debacle, the market has also witnessed the first major hack of Binance.

Binance’s hack saw the loss of around 7,000 Bitcoin. However, history shows that any potential re-org debate is a non-starter from the get-go, as the Bitcoin market has once again stood firm to preserve its 10-year immutability claim.

By Nawaz Sulemanji – May 10, 2019

Back in 2017, the main rhetoric prior to the bull run involved fear about how the community and exchanges would deal with a chain split (which eventually took place as the Bitcoin Cash fork) and also a scaling dilemma that was resolved through the UASF and NO2X incidents.

Where next?

Following a break above $6,200, the market will most likely look to wait and see what support may form above this historically relevant support/resistance band. If margin shorts continue to get squeezed at places like Bitfinex, we can expect them to potentially support the current upwards trend in the markets.

If the parabolic advance continues, prior targets look to suggest that a five-figure valuation may not be as crazy as it sounded just a few weeks ago. However, a period of sideways action is more likely, as both bullish and bearish traders may give some short-term gains back to the exchanges that let them play around with high leverage.

For more news, technical analysis, and cryptocurrency guides, click here.

The post Bitcoin enters another parabolic advance as Bitfinex premiums fall to 1.5% appeared first on Coin Rivet.

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Bitfinex Stakeholder Says the Troubled Exchange Has Sold All One Billion LEO IEO Tokens Issued …

Bitfinex is owned by iFinex, which also owns Tether, the company behind tethers, a “stablecoin” cryptocurrency used to swiftly enter and exit trading …

Chinese OTC Bitcoin trader Dong Zhao has once again taken to Chinese mega social platform WeChat to talk up an IEO (initial exchange offering) being issued by Bitfinex, the troubled cryptocurrency exchange in which Zhao reportedly holds equity, Coindeskreports.

Bitfinex is owned by iFinex, which also owns Tether, the company behind tethers, a “stablecoin” cryptocurrency traders use to swiftly enter and exit positions and conduct arbitrage.

Theoretically, in some jurisdictions, trading with tethers, which is purportedly pegged to and backed 1-to-1 by an equivalent number of US dollars held in reserve, can also help crypto traders avoid the taxable event that can be incurred occur when converting crypto profits back into regular dollars.

Whether or not tethers are actually fully-backed has been a matter of controversy for some time.

Lawyer Preston Byrne tweeted a screenshot from one of iFinex’s public statements.

The statement suggests the company is observing its own accounting standards:

Presented without comment

— Preston Byrne (@prestonjbyrne) May 9, 2019

In June of 2018, University of Texas Finance Professor John Griffin and grad student Amin Shams issued a 60-page document in which they alleged that volumes of tethers were used 2017 to strategically prop up the price of bitcoins

“I’ve looked at a lot of markets,” Griffin told Bloomberg. “If there’s fraud or manipulation in a market it can leave tracks in the data. The tracks in the data here are very consistent with a manipulation hypothesis.”

Over the past two weeks, several enforcement actions have been levied against iFinex.

At the end of April, the Attorney General of New York issued powerful ex parte orders under the Martin Act (which covers securities) compelling iFinex to produce comprehensive financial records and freeze funds.

The orders allege that iFinex covered up the “loss” of $850 USD in funds and then used Tether reserve funds to cover operating expenses.

In documents responding to the orders, iFinex stated that it informed the public and regulators about the use of the funds before it occurred.

The company also claimed the funds were not lost but had rather been “seized” by Panamanian authorities who are now “safeguard(ing)” them.

It turns out the funds were seized from a company called Crypto Capital, which was run by Reginald Fowler. Fowler was arrested last week in Arizona and has been charged with bank fraud, conspiracy and operating an unlicensed money-transmitting business for allegedly providing “shadow banking” to crypto exchanges like Bitfinex. He is facing up to 30 years in prison.

Fowler allegedly processed hundreds of millions of dollars on behalf of crypto exchanges, which have often had trouble maintaining banking because of bank concerns about fund origins and money laundering.

iFinex lawyers have complained in court documents that the freezing of company funds is baseless and has compromised the company’s ability to assure liquidity on its exchanges.

For this reason, iFinex says, it has decided to issue one billion “LEO” tokens in a new instrument being favoured by exchanges called an “initial exchange offering” or IEO.

In an IEO, exchanges sell tokens to private (qualified) investors, partly based on the notion that the token is guaranteed to be listed on that exchange where it may eventually be sold to the public.

This is not the first time iFinex has created a token to assist it with financial problems.

In 2016, Bitfinex was hacked and $65 million USD in bitcoins stolen.

Bitfinex “socialized” the losses across users by docking accounts 35% and marking the void with a token designed to act as an IOU. Users were eventually paid off.

On May 1st of this year, Zhao reportedly wrote on WeChat that Bitfinex was ready to create yet another token, the LEO IEO, and on the 8th, the company released the official “LEO” white paper.

Now Dong Zhao has told Coindesk that all the tokens have already been spoken for in the form of hard commitments and soft (from which investors can back out).

Zhao even reportedly claimed on WeChat May 9th that, “…there’s a high possibility Bitfinex will not conduct a public sale,” if all one billion LEOs, sold at $1 USD each, is snapped up privately.

The anonymous critic “Bitfinex’ed” has written many blog posts and tweets alleging fraud at Tether. Bitfinex’ed has also been threatened by the company.

On May 8th, Bitfinex’ed tweeted that iFinex would laud the success of its LEO IEO, but would never prove it:

Bitfinex will announce that the IEO was a resounding amazing brilliant exciting success.

They will never provide proof.

— Bitfinex’ed — full stop. (@Bitfinexed) May 9, 2019

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