BITFINEX and Its Critics

After experiencing a few “flash-crash” problems and the publication of information on the removal of Ifinex from the register of Singapore’s ACRA (Corporate Regulatory Authority), AB33 wishes to pursue a claim against Bitfinex. To accomplish this, it plans to file a class action suit.

Alledgedly, Ifinex, based in the British Virgin Islands, manipulates the crypto-market by owning and operating the BITFINEX trading platform.

A Long List of Manipulation and Deception

A recent Twitter post by AB33 explicitly announced their intentions to file a class action suit against Ifinex. The charges appear to be related to the conversion of BFX tokens into IFINEX shares and stock market piracy back in 2016.

In fact, to quickly offset the loss of an estimated $72 million in client funds, the exchange chose to allocate itself amongst its users. This led to a 36% conversion of account balances into BFX tokens.

Although they promised a refund of all tokens in their dollar value, BITFINEX also began to encourage its customers to convert their tokens into the company’s own shares.

AB33 also accuses them of violating the laws of the British Virgin Islands by issuing shares for an anonymous entity registered with limited liability.

Concerning the “Flash-Crash” of ETP

Around November 29th, there were a few “flash-crashes” that affected between 60% and 98% of the Altcoin marketplace on the Bitfinex exchange. These crashes caused panic amongst several other marketplaces. Bitfinex argued that the only reason for limiting its stock market decline was the protective measures that it took.

The company disputes the existence of any technical problems that could have caused the crash in market value. However, allegedly, near the end of November, the exchange had been a victim to a DDos attack.

Moreover, a telegram group was able to compile CSV files showing transactions made before and during the crash. After analyzing this data, it becomes clear that the platform had been attacked.

It only took 2 seconds for the value of a token to go from $3.41 to $0.11. During the attack, users were able to purchase 12,720 FTEs for somewhere in between $2,751 and $3.4, after which the price dropped all the way down to $0.11. All of this after only 12 seconds of inactivity of the platform.

Consumers are Worried About Bitfinex’ Transparency

The telegram group was able to save some of the evidence that makes Bitfinex a suspect of fraud. According to the group, the notebooks presented by the platform could simply be a lure. A way in which they could show to the public that they have the most liquidity on the market.

For this technique to work, Bitfinex also had to import the order books from other exchanges. Giancarlo Devasini, Bitfinex’ financial director, has previously mentioned that this has been his strategy in the past.

The IFINEX and the ACRA

Shortly before AB33’s intentions to prosecute IFINEX, there were documents circulating online that indicated the company had been removed from the list of Singapore companies on November 6th.

This news is perfectly plausible since IFINEX had never informed its customers about the registration of the company in Singapore. Some say that this could simply be another way for the company to manipulate the stock market.

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