The former editor at Diar and head analyst at The Block, Larry Cermak reported on October 6 that leading crypto exchange Bitfinex obtained a banking partner in a $133 billion banking giant based in London HSBC.
Cermak said, “Bitfinex is now banking with HSBC through a private account of Global Trading Solutions. Very good fit if you ask me. It’s also worth mentioning that all EUR, JPY and GBP deposits are paused but Bitfinex ‘expects the situation to normalize within a week.”
Why HSBC Needs To Accommodate Bitfinex?
Being one of the first cryptocurrency exchanges, Bitfinex has undergone some of the most difficult challenges an exchange could ever face, mainly before significant crypto markets such as South Korea, Japan and the US.
The exchange’s contention with Taiwanese banks is all around archived, and in April 2017, Bitfinex started a claim against a US-based banking giant Wells Fargo for blocking deposits to the banking account of Bitfinex as well as disrupting tasks of the business.
Bitfinex said at the time, “The decision to initiate legal action is because we cannot allow precedents in this industry where clearinghouses can disrupt businesses that are by all metrics complying with the rules in place. If we allow them to flip a switch and disrupt business simply, then there becomes a precedent in the bitcoin industry beyond just Bitfinex, so we believe it is the appropriate time to take action.”
From that point forward, Bitfinex has moved out of Taiwan and migrated to the Caribbean, and in May, Bloomberg detailed that the trade banded together with Noble Bank to process the exchanges sent by its clients.
However, Noble Bank has reported filing for bankruptcy following an in-principle deal to rebuild debt in January, and with that, the main banking partner of Bitfinex vanished.
HSBC is the first appropriate banking partner Bitfinex has gotten since Wells Fargo in 2017. If the deal between the two can be managed for the long haul, then it will convey a level of stability to the operations of Bitfinex that the exchange failed to anchor in the previous four years.