The Ultimate Guide to Bitfinex: Complete Review

Whether you have been trading in cryptocurrency assets since a long time or have just delved into this world, chances are that you have heard about Bitfinex.

Ranking over the fifth spot on the list of the world’s top 10 cryptocurrency exchanges by trading volume and being the largest Bitcoin trading exchange, Bitfinex has made a name for itself when it comes to cryptocurrency trading.

While carving that niche should have been a milestone, the exchange does not seem to have had the opportunity to translate it into credible operations and has been riddled with controversies.

With all the recent publicity that Bitfinex has been garnering, we thought that it was about time to revisit the exchange’s details in order to learn more about it, its operations, its approach to its customers and its plans for the future.

History Of Bitfinex

Bitfinex was founded in 2012 by Raphael Nicolle and Giancarlo Devasini. While Nicolle left the company in 2015 after serving as its Chief Technical Officer, Devasini is still working with the exchange as its Chief Financial Officer at the current time.

While the frontend of the exchange is named as Bitfinex and had its headquarters based in Hong Kong, it is owned and ran by iFinex Inc., a company that is located in the British Virgin Islands.

Bitfinex’s operations are spearheaded by J. L. van der Velde, who has served as its CEO since 2013. However, not much information is available about van der Velde in terms of a digital footprint despite him being the head honcho of one of the most well-known cryptocurrency exchanges in the world.

Due to this reason, while van der Velde serves as CEO and Devasini remains the only co-founder to remain with Bitfinex, the exchange is often touted to have found its persona in Phil Potter, the Chief Strategy Officer at Bitfinex.

But just like Devasini who was fined around 100 million Italian Lira in 1996 for selling pirated copies of Microsoft software (which comes around to $65,000), Potter has had his fair share of controversy in being fired from Morgan Stanley after he gaudily bragged at length to the New York Times about his $3,500 Rolex watch and his aggressiveness to making money through creative means.

Despite the colorful past of the people associated with it, or in van der Velde’s case, a lack of digital past, Bitfinex did establish itself as a high-value cryptocurrency exchange ever since it started its operations.
Which leads us to Bitfinex’s present operations and its current status.

What Does Bitfinex Do?

First things first!

As of November 9, 2017, Bitfinex does not provide services to individuals in the U.S.

However, corporations within the country can still move forward with signing up and using Bitfinex’s services.

With that information, let’s continue to our guide.

Bitfinex offers popular cryptocurrencies through its trading portfolio, including Bitcoin, Ethereum, Bitcoin Cash and Litecoin. In addition to that, Bitfinex trades in various other and new cryptocurrencies through its platform and holds a cryptocurrency trading volume of more than $792 million at the current time.

Statistics by CoinMarketCap

It is also one of the most consistent Bitcoin to USD exchange platform, where it usually tops the daily global charts for Bitcoin trading.

Similar to other traditional exchanges, Bitfinex operates on the Maker/Trader mechanism.

The exchange offers trading opportunities in its listed cryptocurrencies through four different core products, namely Exchange Trading, Margin Trading, Margin Funding and Over the Counter Trading.

Exchange Trading
The exchange trading works through a platform with integrated order books on it. Customers can post their buy, sell, and trading orders through the interface and enjoy cryptocurrency trading operations with ease.

Margin Trading
Bitfinex offers margin trading to its customers with a leverage of up to 3.3x. Users can use the service to open positions with leverage, where they can receive financing to trade in an amount higher than their available account balance.

Margin Trading is one of the most popular yet most risky aspects of trading, while trading on leverage allows users to earn higher profits than they would have with their original capital, it also amounts to more loss in case the transacting cryptocurrency falls in value before the order is executed.

Margin Funding
This method supports the margin trading mechanism, from here, users can lend out their cryptocurrency funds to margin traders to earn profits on their holdings.

Over the Counter Trading
Exclusive to larger trades, the Over the Counter Trading service by Bitfinex is meant for traders that are seeking to execute trading orders that involve a higher amount than the usual individual trades.

The trading pairs available to Bitfinex customers are provided below (fiat pairings are only available to verified customers on the platform).

To carry out day to day operations, Bitfinex provides its users with a traditional interface which is easy to follow for experienced and new traders alike.

While it is not as simple as the Coinbase app, it fulfills the basic requirements and performs relevant functionalities with ease.


How Does Trading On Bitfinex Work?

Well, before you start trading on the Bitfinex exchange, it is important to know a couple of additional points. Bitfinex greets new users to their website by showing a disclaimer letting the potential user know what they are about and how they operate.

A few key points that the notification brings to light are presented below.

Professional Platform -Bitfinex considers itself as a professional platform and suggests that new traders go to a “more straightforward exchange”, earn a few stripes and then come back when they are more professional.

Minimum Account Equity – Bitfinex requires that you make a one time 10,000 USD Deposit (or 10K USD equivalent) to begin trading. But, not to worry, this only means that you have to make a one time deposit of 10,000 USD. You can then withdraw it after the account has been verified and activated.

Verification Timeline – If new users seek to complete the verification process, (you’ll definitely want to do this if you want yo make deposits), they’ll have to wait because the Bitfinex system is in a state of backlog. The process of verification can take about six to eight weeks to process and complete.

Inactivity Fee – Bitfinex explicitly states that it is not a wallet service.

The platform tells potential users that they need to withdraw funds from the Bitfinex platform if they are not actively trading.

The platform will plan on implementing an inactivity fee for those who have balances on Bitfinex yet choose not to actively trade.

Since we got that out of the way, let’s get back to regular programming.

To execute trades, Bitfinex uses different types of orders that are placed over its exchange platform. The order types are mentioned below:

  • Market Order
  • Limit Order
  • Stop Order
  • Stop-Limit Order
  • Trailing Stop Order
  • Fill or Kill (FOK) Order
  • Scaled Orders
  • One Cancels Other (OCO) Order Option
  • Hidden Order Option
  • Post-Only Limit Order Option

While some of these are advanced mechanisms that are meant to be used by seasoned traders, let’s go through the definitions for the three most commonly used order types.

  • Market Order

This is where orders are placed at the current market price, to be executed without delay.

For instance, if you place a market order to buy, you will immediately be met with a matching market order which is selling the respective digital assets, and vice versa.

However, as cryptocurrency values change rapidly, buy orders can sometimes cost higher to complete, and similarly, sell orders can be completed at a lower price.

  • Limit Order

This is where a person puts a limit on their order. If the market price reaches the value specified in the order, it gets fulfilled usually through market orders.

  • Stop Order

This is where order requests are posted when traders want them to be executed at a specific price. Stop orders are similar to limit orders, yet differ in that the main point of these orders, is to sell at as high a price as possible.
These orders, along with the ones mentioned in the list above, all follow the maker-taker mechanism.

To simplify, a person is considered a “maker” when they put in an order that makes or adds liquidity to the market. For instance, if you place a limit order, you usually add liquidity to the market since the execution of the order takes some time.

Whereas, a person is labeled a “taker” when they put in an order which takes liquidity away from the market, such as a market order or stop order, which is fulfilled almost immediately.

And this brings us to the fee structure at Bitfinex.

What is the Fee Structure at Bitfinex?

Like most exchanges, Bitfinex segregates its fees into two sections, between market makers and market takers.

The fee structure changes according to the amount that the individual trades on the exchange.

While Bitfinex presents itself as an exchange where deposits are “free”, it charges its customers for any deposit which fall below $1000 in value.

The exchange terms this charge as a “small deposit fee”, and the amount of charges levied depends upon the cryptocurrency being deposited.

Here are the charges for deposits of less than $1000, for some of the most popular cryptocurrencies being traded on Bitfinex.
For bank wire transfers, the charges are 0.100% of the deposited amount, with a minimum of 20 USD/EUR (regardless of the amount deposited).

Furthermore, the withdrawal fee on Bitfinex also differs on the currency being withdrawn.

The complete list of cryptocurrencies and their corresponding charges can be seen here.

The fee structure at Bitfinex matches that of competing exchanges, and sometimes also bests them. For instance, the trading fee at Kraken for the Bitcoin/USD has a minimum taker fee of 0.26%, whereas Bitfinex has it pegged at 0.200%.

The fee for margin funding is defined at the following rates.

How to Sign Up With Bitfinex?

Signing up with Bitfinex is simple. All that interested customers need to do is log in to the site and follow the simple sign-up process with their email address being the only information required during the initial steps.

In order to perform fiat deposits and withdrawals, customers need to have their account verified by providing their contact information including their country of residence.

They also need to provide proof of identification by submitting relevant documentation online.

Once the required information has been submitted, it takes 4-5 weeks for the verification process to get completed.

It is prudent to note that verification is only required for fiat-based transactions. If someone only deposits and withdraws cryptocurrencies, then they do not need to provide any verification information and can start trading as soon as they have created their account.

This particular approach makes Bitfinex an easier platform as compared to other exchanges, which require some form of verification for even cryptocurrency trading, deposits, and withdrawals.

Bitfinex does not provide its services in the following countries

Bosnia and Herzegovina
North Korea

Bitfinex also does not provide its services to individual customers from the U.S.

How to Deposit or Withdraw Funds on Bitfinex?


As mentioned above, any customer can deposit cryptocurrency into their Bitfinex account without having to go through the verification procedure.

For this, they can use any of their existing wallets to transfer their cryptocurrency into the Bitfinex account. Bitfinex provides an up to date list to its customers for cryptocurrencies that are supported for deposit purposes. Bitfinex customers can access the list here.

To support its different products, Bitfinex also provides three types of wallets.

  • The exchange wallet is offered to deposit and store cryptocurrencies that are used for trading purposes over the platform.
  • The margin wallet is available for trading on margin.
  • The funding wallet is provided to facilitate lending to margin traders.

Customers can use the provided addresses to deposit their cryptocurrency accordingly.

The processing time for deposits to reflect in the Bitfinex wallet depends upon the cryptocurrency network and how soon it confirms the transactions.

Fiat deposits can be made in supported territories after customers have completed the verification procedure for their accounts. To perform a fiat deposit, customers can transfer funds through their bank accounts to Bitfinex’s account.

Bitfinex currently supports deposits in USD, EUR, GBP, and JPY, with support for the last two being added as recently as March 29, 2018.

The amount of time that it takes to make fiat deposits depends on a region to region basis.


Cryptocurrency withdrawals are also processed as soon as the network confirmation has been completed.

However, Bitfinex suggests that customers have additional security measures in place for their account.

Additional verification may be conducted through phone or email, allowing the exchange to ensure that the withdrawal was indeed requested by the customer before having it processed.

In case these security measures have not been set by customers, then the exchange could take a bit longer to process the withdrawal request.

Each cryptocurrency also has a minimum withdrawal limit associated with it. In case someone wants to withdraw an amount that falls below that threshold, they can contact the Bitfinex team to look into the request.

Their request is supposed to get entertained within 7 days (every customer is allowed one such withdrawal per week).

The time to process fiat withdrawals depends on the country where the transfer is to be made, with regular USD transfers being sent within 5-10 business days.

An express USD transfer can be completed within 24 hours.
However, fiat withdrawals usually take a longer amount of time on the Bitfinex platform, as demonstrated by this announcement thread on Reddit which turned into a complaint outlet.

It may be prudent to go with cryptocurrency deposits instead.

How Safe Is Bitfinex?

There is no simple answer to this.

Bitfinex now provides industry standards for security such as the usage of cold wallets to store some of its customers’ funds offline; and the usage of two-factor authorization (2FA) for an added layer of security through email or phone verification.

Yet, the exchange has two hacking incidents to its name, with the last one touted as one of the biggest hacking incidents in the history of cryptocurrency trading.

Bitfinex was hacked for the first time in May 2015, where hackers made off with more than 1,500 Bitcoins that were $40,000 in value at the time.

However, since it seemed like a rare, and at that time, a one-off incident, not many people looked into it, especially since Bitfinex had stated that it the incident “will be fully absorbed” by it.

And then there was another one.

On August 2, 2016, Bitfinex customers were horrified to know that the site which they were trusting with their funds had been compromised again.

The incident created widespread panic at first. This soon turned into a sense of prevalent grief for Bitfinex customers when it came to light that the exchange had lost 119,756 Bitcoins (more than $65 million in value) at the time of the incident.

It was reported that the hack originated from a vulnerability issue in the multi-signature mechanism of the wallets which Bitfinex provided to its customers.

The multi-signature powered wallet was developed with Bitfinex’s technology partner BitGo. The mechanism was supposed to work in a way that Bitfinex alone would not be able to sign-off on any transactions, with BitGo added as an extra layer of security to sign them off.

But this particular method of security did not work the way it was intended.

According to Bitfinex, the hackers used multi-signatures data to send transaction requests, which as per normal process went to BitGo and were then signed off by it. However, not many details were provided on exactly where the hackers got hold of a set of these signatures from Bitfinex.

However the hack took place, the fact remained that it did leave the affected customers short of their funds, and so Bitfinex decided to compensate them for their loss.

But the exchange did not compensate the affected customers in Bitcoin or even in fiat, and instead went the unconventional route of creating a new token of its own just for the purpose of repayment for the hacking incident.

The repayment token was dubbed as BFX and was distributed among the affected individuals. Bitfinex created the BFX token with the intention to offer compensation to those affected customers.

The compensation methods included equity in iFinex (Bitfinex’s parent company) in exchange for each BFX token standing at $1.
The exchange then went on with deploying various efforts to have as much BFX tokens claimed in equity or exchange offers as it could, announcing in October 2016 that the owners of 20 million BFX tokens had agreed to exchange them for shares in iFinex.

The process went on with Bitfinex making various announcements periodically about exchanging the BFX tokens for shares in the company.

In April 2017, Bitfinex announced that it was going to complete the process of getting the distributed BFX tokens redeemed by its customers by buying back the remaining tokens for $1 each – and with it, will pay back all of the affected customers accordingly.

The way that the whole process was handled made a large part of the cryptocurrency community question the transparency of it, but Bitfinex remained unfazed and continued with its operations.

But that was not the only controversy that Bitfinex has been a part of in the past.

Bitfinex and Tether

If you were thinking that the hacking incident and its subsequent handling was a handful, then you would certainly like to know about the most recent developments pertaining to the exchange.

In January 2015, Bitfinex announced that in addition to cryptocurrency and fiat transfers, it was also going to accept direct funds transfer in Tether (USDT), a cryptocurrency that claims to be directly backed by reserves in U.S. dollars, where each Tether is equivalent to $1.

Originally named “Realcoin”, Tether has been in operation since July 2014. The cryptocurrency was co-founded by Brock Pierce – who was also introduced as the co-founder of EOS.IO before exiting the new venture after being called out on his antics by John Oliver. Pierce is also known for being one of the key characters in the Digital Entertainment Network child sex abuse scandal.

Tether got its new name in November 2014, and the move was announced by Reeve Collins, who served as the venture’s CEO at the time. It was not until Bitfinex announced Tether’s unconventional adoption for its platform that the coin started to garner mainstream attention – since it could not be comprehended why Bitfinex was giving so much attention to a random digital coin.

However, whatever the reasons were, the hype created around Tether by Bitfinex on how it was a way to move actual U.S. Dollar from exchange to exchange without getting into the hassle of fiat deposits seemed to increase the cryptocurrency’s adoption.

Another thing that was of concern here was that while Tether claimed that it had just as many dollars in reserves as it had pegged the cryptocurrency’s total supply to be, it was never confirmed by a third party.

The auditing firm, Friedman LLP, which Tether hired to check its reserves, also left the partnership abruptly without ever completing the audit, and without commenting on why it was doing so.

While questions kept rising, Bitfinex stayed silent on why it was pumping the usage of Tether so much despite speculations within the cryptocurrency community on their alleged connection.

This all made a lot of sense when the Paradise Papers, a leak of more than 13 million documents detailing offshore investments by key figures all over the world, were released by the International Consortium of Investigative Journalists.

The information from Paradise Papers showed that Tether Holdings Limited, which owns Tether as its subsidiary, was actually set up in Hong Kong in 2014 by none other than Philip Potter and Giancarlo Devasini. After the information was leaked, it was also confirmed by a Bitfinex official to Bloomberg that J. L van der Velde was the CEO of Tether.

About a month before the confirmation to Bloomberg was brought to light, Tether had also announced that it had lost 30 million Tether tokens ($30 million) to an unknown hacker.

The way that this U.S. dollar-backed cryptocurrency which did not have its reserves verified by a third party now claimed the loss of $30 million raised a lot of eyebrows throughout the cryptocurrency community.

And the appearance and subsequent popularity of a rogue account by the name of Bitfinex’ed did not help the situation.

Even before Friedman LLP left the auditing process of Tether abruptly and before the connection was made between Tether and Bitfinex, the anonymous writer by the name of Bitfinex’ed provided several points on why Bitfinex and Tether were related or how this was not going to end well for the customers.

While Bitfinex’ed’s analysis and repeated posts are borderline obsessive with exposing the exchange, they do make some good points on the legibility of Tether, and Bitfinex’s attempts to make it a widely used cryptocurrency between exchanges in place of actual U.S. dollars.

Bitfinex’ed also accuses Bitfinex of using Tether to buy and trade Bitcoin out of nothing only to hype up the price of the cryptocurrency.

The allegations and the subsequent events seemed enough for the U.S. Commodity Futures Trading Commission (CFTC) to issue subpoenas to both Tether and Bitfinex.

As of now, this remains to be a developing situation. However, there’s a high chance that the future could turn messy for both Tether and Bitfinex.

But Bitfinex Moves on and Has Plans for the Future

Despite all of these negative stories that have been associated with it, Bitfinex has kept his head held high and has been implementing various updates to the overall operations of the exchange.

The recent addition of GBP and JPY was a part of those efforts, and Bitfinex also adapted Segregated Witness (SegWit) to be able to facilitate faster transactions on the Bitcoin Network.

With it, the exchange also announced in February 2018 it will be going decentralized in the future by using EOS.IO’s blockchain development solutions.

While EOS.IO still has Pierce’s past association ghosting over it, the platform has emerged to be one of the most sought-after projects in the blockchain and cryptocurrency community even before its complete release, and so Bitfinex’s partnership with it could prove to work in its favor.

So Is There A Reason To Use Bitfinex At All?

Even after the multiple hacking attempts that Bitfinex went through, the exchange remains operational and that in itself is a feat.

However, seeing that it does not provide anything out of the ordinary and provides basic exchange functionalities, choosing another exchange that does not have the stench of repeated controversies all over it seems like a good idea.

Having said that, many users swear by the utility of the platform and streamlined nature of it, they complain about the lack of customer service and are somewhat wary about the fiat deposits and withdrawals.

The platform may be one to check out if you can get past the negative publicity.

Bitfinex Rating: 4.5 - Review by