Bitfinex Review and Comparison
By: Steven Hay | Last updated: 1/19/23
Bitfinex is a Hong Kong operated cryptocurrency exchange that has been in operation since late 2012. In the following post, I will review the exchange, the company behind it and also some of the more controversial episodes it experienced in the past.
Bitfinex Review Summary
Bitfinex is an advanced, veteran cryptocurrency exchange with a haunted past of hacks and allegations. The exchange is well suited for advanced traders and also supplies the option for margin trading and lending. Bitfinex does not accept US customers.
That’s Bitfinex in a nutshell. If you want a more detailed review about Bitfinex keep on reading, here’s what I’ll cover:
- Bitfinex Overview
- Bitfinex Services
- Bitfinex Difficulties
- Currencies and Payment Methods
- Bitfinex Fees
- Supported Countries
- Customer Support and Reviews
- Bitfinex vs. Binance
- Conclusion – Is Bitfinex Legit?
1. Bitfinex Overview
Bitfinex was founded in the British Virgin Islands in 2012 by iFinex inc and it is headquartered in Hong Kong. The company initially started out as a P2P margin lending platform for Bitcoin only. Some of the founders and management of iFinex inc. are also related to Tether, the US pegged Stablecoin.
2. Bitfinex Services
Bitfinex offers its customers a variety of services including:
Advanced Trading Platform
Bitfinex offers the most liquid order book in the world. High volume is important for traders, as it ensures a low spread, which is the difference between the best bid and ask prices.
Bitfinex features an advanced, customizable GUI, over 50 trading pairs (e.g. BTC/ETH), and plentiful order types, such as limit, market, stop, stop-limit, trailing stop, fill or kill, and scaled orders.
Bitfinex’s trading platform interface is customizable. You can also get access to advanced charting functionality and API access. These features combine to make it a popular exchange with more sophisticated cryptocurrency traders.
Margin Trading and Funding
Bitfinex users are able to borrow and trade with up to 3.3x leverage through the site’s P2P (Peer to Peer) margin trading platform. Borrowing terms (amount, duration and interest) can either be determined by the user himself or automatically through Bitfinex.
On the other hand, cryptocurrency owners are able to lend their funds securely to traders in order to earn interest on it. Users can offer funding across a wide range of currencies & assets, at the rate and duration of their choice.
Warning: Margin trading amplifies both upside and downside risk and is not recommended for new traders. Margin funding locks your funds on Bitfinex for the duration of the loan.
Over The Counter Services
For those who wish to trade major amounts ($100,000+) of cryptocurrency privately, Bitfinex provides an over-the-counter trading facility. This service matches, and presumably secures major private deals.
Bitfinex offers the trading of derivatives contracts, which give traders the ability to speculate on the price of an asset, without buying or selling it outright. Traders simply need to collateralize their derivatives account with USDT in order to trade.
Staking and Lending
Lastly, Bitfinex also offers a staking and lending service. This allows users to stake or lend their cryptocurrency holdings in an easy way, without needing to have the technical knowledge or operate staking software.
3. Bitfinex Difficulties
It’s no secret that Bitfinex has experienced its share of problems. In 2015 the exchange was hacked for the first time and 1500 Bitcoins were stolen.
The April 2016 theft of nearly 120,000 BTC from Bitfinex stands as the second-largest Bitcoin heist in history, dwarfed only by the loss of around 750,000 BTC by Mt. Gox.
The key difference between Gox and Bitfinex is that the latter made its clients whole. Although not all accounts were affected, Bitfinex made the decision to spread the loss among all its clients. All users took 36% “haircuts” on their account values.
One year later, all clients were fully compensated—at least those who’d held their BFX tokens, which represented IOUs from Bitfinex.
The problems didn’t end there for Bitfinex. In April of 2017, Bitfinex’s bank accounts were frozen by its correspondent bank, Wells Fargo.
This situation persisted for weeks, leading to client complaints and all kinds of distortions in Bitfinex’s pricing. Normal service was eventually restored—although US dollars and US customers are no longer accepted by Bitfinex as a result of these banking headaches.
More recently, it was revealed that Bitfinex lost access to $850 million worth of their customer funds, due to one of their payment processors – Crypto Capital – having funds seized by Poland, Portugal and the USA.
4. Currencies and Payment Methods
Bitfinex accepts fiat deposits in EUR, JPY, GBP, and USD. Fiat deposits can be made through a wire transfer only. Bitfinex also supports Tether (USDT), the quasi-fiat token unofficially pegged to the US dollar’s price.
Free deposits and fairly cheap withdrawals are available for Bitcoin Litecoin, Ethereum, Zcash, Monero, Dash, Ripple, Iota, EOS, and an additional 80+ assets.
Bitfinex requires verification for Tether usage and expedited cryptocurrency withdrawals. However, the exchange remains perfectly usable for those who only wish to provide an email address. Bitfinex also offers direct access via a Tor hidden service.
5. Bitfinex Fees
Bitfinex utilizes a taker-maker fee model where people who fulfill existing orders are considered takers, while traders that place new limit orders are considered makers.
Fees start from 0.2% for takers and can drop as low as 0% for large maker orders. There is no trading fee for large orders conducted through the OTC desk.
Bank wires have a 0.1% deposit and withdrawal fee, which can reach up to 1% if you’re looking for an expedited withdrawal.
Cryptocurrency deposits are generally free of charge while withdrawals include a small fee, depending on the currency withdrawn.
For the complete fee schedule including margin trading fees see this page.
6. Supported Countries
After looking hard at the ToS and FAQs, the only country explicitly excluded from using the services is the United States of America.
Using Bitfinex’s ‘basic’ services e.g. the exchange, margin trades & digital assets deposits /withdrawals requires only a valid email address, so effectively they’re available worldwide – at least from the company’s end (of course you are responsible to follow your country’s legislation on the subject).
As for the more advanced levels, a deeper KYC process including a ‘proof of address’ is required. However, since the list of available countries is nowhere to be found on their site, you’ll only be able to tell whether you’re eligible or not once you’ll go through their verification process.
7. Customer Support and Reviews
Bitfinex supplies its users with an extensive knowledge base and a ticket based support center. Its average TrustPilot score shows that it’s doing a relatively good job in maintaining user satisfaction (most exchanges receive a “poor” rating).
However, there has been a lot of criticism about the exchange throughout the years, mainly about the transparency of their business and their close relation to the stablecoin Tether. It always feels as if they are hiding something without the ability to actually prove it.
On April 24th, 2018 Bitfinex was accused by New York’s attorney general’s office of an $850 million coverup stating:
“Our investigation has determined that the operators of the ‘Bitfinex’ trading platform, who also control the ‘tether’ virtual currency, have engaged in a coverup to hide the apparent loss of $850 million of co-mingled client and corporate funds”
Bitfinex has denied the claims, sending an open letter to its users a day after, saying that the attorney general’s office letter is filled with inaccuracies and false assertions.
8. Bitfinex vs. Binance
Both Bitfinex and Binance support an impressive amount of cryptocurrencies. However, Bitfinex’s interface is much more advanced (and confusing) than Binance’s.
When it comes to reputation, while Binance has been around only since 2017, it still maintains a much better reputation in the community due to its relatively clean past.
Bitfinex’s past hacks, accusations and connection to Tether tend to raise some concerns in the Bitcoin community. Fees are generally lower on Binance, with a fixed 0.1% fee as opposed to the taker-maker fee Bitfinex uses.
So overall, unless you’re looking for advanced features, it seems that Binance is probably a better choice than Bitfinex. You can read my complete Binance review here.
9. Conclusion – Is Bitfinex Legit?
If you’re a non-US advanced trader or looking to trade large sums, then Bitfinex is definitely an option. However, if you’re new to cryptocurrency and looking to get your first coins, Bitfinex is not for you.
The lack of easy deposit methods combined with the complicated interface will certainly take time to master and will make costly mistakes more likely. Newcomers are advised to stick with a simpler exchange that offers a variety of familiar payment options (e.g. Coinmama, CEX).
On the other hand, if you’re an experienced cryptocurrency trader, Bitfinex likely offers everything you’ll need and more. The high cryptocurrency liquidity combined with advanced features such as margin funding, leverage, and multiple order types makes it a great trading platform.
For those worried about the safety of their funds due to past hacks, there’s not a lot to say other than it seems that until today Bitfinex has made it a priority to reimburse their customers in such cases.
Also, some may argue that the multiple hacks have made the platform much more resistant to future attacks.
Have you used Bitfinex yourself? I’d love to hear your experience in the comment section below.
Please I just got scammed today with 100usd. I wish I had come here before I speak to a lady by the name HIllary Joffe. I knew there services was too good to be true. I wanted to try with 100usd to see if they willl scam me, and they did. They said that I needed to deposit 1000usd in order to recieve my profits.
There is no way I am letting these people scam any more persons. They got deposit of my $65000 via bitcoin and claimed it never reflected on their end. There was no way I could prove they actually received that payment, till Assetsclaimback Advisory took it upon themselves to step in and pave way for the repayment of my already lost money. Bitfinex are not what they claim to be.
Theoretically you can track the flow of many Bitcoin addresses manually with an explorer using clustering and forensics analysis, but to do it properly you’d need in many cases hundreds of hours. So tracking tools are wanted to follow up the coin flow from the thief, ransomware attacker, tax debtor or drug dealer until it ends at an exchange for cashing out. The owner of an address can be found out then with help of police or law enforcement. I know two tools able to support here, one is the walletexplorer and the other is btctester . The latter calculates for each address a privacy score between 0% and 100%, the lower it is the
easier the address is a candidate to reveal the privacy.
Not sure who wrote this article. WHy do you want to use Bitfinet with so much fishy history. Why this article does not make it a strong standout point? People, don’t be a fool……
Oh yeah Cryptorecoveryltd are very effective ,i used them some months ago for another platform.
Scammed me for $350000
did you get your money back?