Bitfinex, a Hong Kong based cryptocurrency exchange, has decided to halt verification requests from U.S. customers, citing a backlog of requests and problems providing USD deposits and withdrawals, according to an announcement on its website. The company noted it has been considering exiting the U.S. market for some time.
While noting it has been able to normalize banking for certain individuals and corporate customers in certain jurisdictions, Bitfinex said it has been difficult to find compliant banking solutions for U.S. customers in general.
The company has selectively invited users in certain jurisdictions to use online banking channels. This has been an ongoing process.
Bitfinex noted that a surprisingly small portion of its revenues have come from verified U.S. individual accounts in contrast to a disproportionate amount of its resources required for servicing U.S. individual needs, including legal, regulatory and support.
The exchange expects the regulatory climate to become increasingly challenging in the future.
Exchanges based in the U.S. are better positioned to service U.S. customers, the exchange noted.
Bitfinex thanked its loyal U.S. customers, but noted its obligation to its full customer base and shareholders to allocate its resources rationally.
Over the next 90 days, Bitfinex will discontinue services to U.S. customers, and will be updating affected users on timing and specifics. The company said it wants to minimize disruption for U.S. customers as much as possible.
The company will bar U.S. customers from trading ERC20 tokens issued through ICOs as of noon UTC on Aug. 16, and it will not allow U.S. customers to trade such tokens.
The announcement should not be construed to indicate the ERC20 tokens are a security under U.S. law or require U.S. regulation, according to the announcement.
The company apologized for any inconvenience created by the decision.
Also read: Bitcoin exhange Bitfinex pulls out of Washington State
Bitfinex has experienced difficulties with U.S. customers over the past year.
The exchange pulled out of Washington State in March after deciding not to pursue a money transmitters license for the state, following several months of discussions with the state’s department of financial institutions. The state would not allow the company to offer its services without such a license.
In April, Bitfinex stopped processing bank transfers after announcing delays in U.S. withdrawals, a development that caused some to question the exchange’s solvency.
The announcement came days after Wells Fargo, an intermediary American international bank, stopped processing transfers from Bitfinex’s Taiwanese banks.
The U.S. Commodities Futures Trading Commission took action against Bitfinex last year, fining the exchange $75,000 for offering illegal off-exchange financed retail commodity transactions and failing to register as a futures commission merchant.
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