Bitfinex Temporarily Shuts Down Deposits and Withdrawals, Says Exchange Funds are Safe
The crypto exchange Bitfinex has recently announced that its deposit and withdrawals were suspended. The company used its Twitter profile in order to make the announcement.
According to the exchange’s tweet, this was happened due to some outage on one of the company’s network providers. Therefore, they had to shut down the services temporarily.
Due to the outage of one of our network providers we temporarily paused deposits and withdrawals. Funds are safe in cold storage. Situation should be restored ASAP (ETA 3/4h). Apologies for the inconvenience.
— Bitfinex (@bitfinex) May 31, 2019
They also affirmed that all funds remained in cold storage and that the situation should be restored in around three to four hours. This was pretty much what happened. Around three hours after the announcement, the services were live again.
During the downtime, the CTO of the company, Paolo Ardoino, has posted several links to the hot wallets of the company. He made it in order to show to the community that their funds were safe and that nothing was happening.
Downtime Caused Worries Because Of Recent Controversy
One of the reasons why the downtime was so worrisome for the community was because of the recent controversy that Bitfinex and its sister company Tether faced. The New York Attorney General (NYAG) Letitia James has accused the two companies after Bitfinex lost $850 million USD and Tether used the funds of its stablecoin in order to make up for the money that was lost.
This created a major problem for the companies, which are now facing the NYAG in court. Bitfinex never actually revealed the loss to its investors and used the money of the stablecoin, which was supposed to be backed 1-to-1 with USD. It was a double mistake.
The Community Reacted
The price of Tether has somehow remained stable despite all the trouble, but it is fair to say that the confidence of the investors has been badly shaken by what happened, which is why people were so suspicious today when the downtime happened.
A user called @CryptoFraggle, for instance, has shown a Simpsons gif affirmed that “the end is near”, something that many investors and traders were probably thinking when the company affirmed that the downtime was happening.
Other people, such as @Naji_GK, only affirmed: “Let’s panic”. Others affirmed that the case was very similar to Cryptopia when the exchange was hacked.
Fortunately, most of the users preaching doom were wrong. There was no reason to be so afraid, after all, since the funds were eventually released for withdrawals. It looks like, at least today, people will not have to worry anymore.