Bitfinex Reviews for June 2023

Total exchange BTC inflows have been net negative since July 2021. There have been more outflows than inflows to most exchanges except Binance, FTX, Bittrex and Bitfinex since last July, suggesting sellers may be exhausted according to Glassnode. Bitcoin inflows across all exchanges have been net negative since last July, but four major exchanges have been running contrary to this trend with nearly an equal amount of net positive inflows. There have been total net outflows of 46,000 BTC (worth around $1.8 billion at current prices) from all crypto exchanges since last July. Only Binance, Bittrex, Bitfinex and FTX have seen net positive inflows of 207,000 Bitcoin (BTC), according to data from blockchain analytics firm Glassnode’s Monday newsletter. Over the same time period, net outflows have totaled 253,000 BTC from all other exchanges tracked.

In what is presumed as a technical error, popular crypto exchange Bitfinex paid a seismic $23.7 million dollars in a gas fee for a comparatively nominal $100K transaction. Crypto exchange Bitfinex completed a highly consequential transaction on Sept. 27 when sending $100,000 of the stablecoin Tether (USDT) to the layer-2 subsidiary platform DeversiFi. For reasons unknown, the exchange paid 7,676 ETH, equivalent to $23.7 million, marking quite possibly the largest gas fee ever recorded on the Ethereum blockchain. According to blockchain data from EtherScan, the deposit transaction was initiated at 11:10 UTC this morning from Bitfinex’s second-largest wallet, via a second address, to the wallet of DeversiFi. The transaction carried an “erroneously high gas fee”, even though DeversiFi promotes a service to “avoid gas costs and frustration, saving you time and money with every trade or swap.” To put the enormity of this fee into context, consider the fact that the average transaction fee on the Ethereum blockchain currently stands at 0.013 ETH, or $39.96. In addition to this, two weeks ago, $2 billion of BTC was transferred between unknown wallets for an infinitesimal fee of $0.78. DeversiFi revealed that they have launched investigative procedures to determine the most probable cause of the matter, while also adding that: “No customer funds on DeversiFi are at risk and this is an internal issue for DeversiFi to resolve”, as well as that "operations are unaffected.” In response, Bitfinex tweeted that: “In transactions such as these, the fees are shouldered by third party integrations with Bitfinex," suggesting that the exchange will not directly bear the burden of the fee. In June 2020, another gas fee mystery occurred with numerical similarities to the Bitfinex case when three small to medium transactions registered seismic costs, with one 0.55 ETH transfer carrying $2.6 million in fees. At the time, Ethereum co-founder Vitalik Buterin expressed his agreement with the human-error narrative, adding that: “I’m expecting EIP-1559 to greatly reduce the rate of things like this happening by reducing the need for users to try to set fees manually.” However, experts in the field circulated theories of blackmail, fraudulent activity and even money laundering after the last of the three transactions was confirmed as a “malicious attack” when the wallet owner reached out to the mining pool that facilitated the transaction. The owner in this case subsequently received 90% of the lost funds.

The latest price action came hours after fresh selling pressure thanks in part to an unknown whale trying to short it with over 5,000 BTC. As noted by journalist Colin Wu, July 8 had witnessed short positions build up on major exchange Bitfinex. A mystery Bitfinex user began entering short positions with a stack of at least 5,219 BTC, worth $173 million at $33,000 levels. “According to datamish data, from 13:00 Beijing time, a account (or institution) has borrow bitcoin to short on Bitfinex,” Wu reported. “As of 15:03, he borrowed a total of 5219 BTC, and this number is still growing. Most short positions are non-hedged.” At the time of writing, total Bitfinex short positions had increased 160% in around two hours. Bitfinex shorts remained roughly balanced with longs, Bybt figures nonetheless showed. The whale shorting is not new. As Cointelegraph reported, June likewise saw fluctuations in trader behavior, with Wu eyeing 15,000 BTC worth of bets flooding in on a fresh price dip on June 25. The next day, BTC/USD saw a fresh retest of $30,000 support.