Established in 2012, Bitfinex is one of the oldest crypto exchanges still operating today. Having gone through many market cycles, from dynamic uptrend seasons to security and legal scandals, Bitfinex has remained steadfast and continues to expand its ecosystem. If you're curious about this special exchange, let's explore Bitfinex with Allinstation!

In 2023, Bitfinex was granted the first digital asset license by the El Salvador government, opened an office there, and supported the issuance of "volcano" bond tokens. Additionally, the exchange invested in Orionx - a Chilean crypto exchange, and launched a P2P trading platform in Venezuela, Argentina, and Colombia, aiming to expand its influence in Latin America.

Bitfinex and Its Special Relationship with Tether (USDT)

One of the things that has always been associated with controversy is Bitfinex's direct connection to Tether - the issuer of USDT, the stablecoin with the largest market capitalization.

• Both Bitfinex and Tether are owned by the parent company iFinex Inc.
• The senior management teams of the two companies have significant overlap. For example, Giancarlo Devasini (Bitfinex CFO) is also a key figure behind Tether's operational strategy.
• During many periods, USDT was massively issued and circulated through Bitfinex - something that has raised market manipulation suspicions in the community.

This relationship was the focus of a years-long investigation by the New York Attorney General's Office (NYAG). In 2021, iFinex agreed to pay a $18.5 million fine to resolve allegations related to using Tether funds to cover financial shortfalls at Bitfinex following a banking incident in 2018.

Read more: What is Tether? What's special about the empire behind the largest USDT Stablecoin in the market?

2016 Hack: A Historic Shock and Bitfinex's Handling

In 2016, Bitfinex became a victim of one of the largest hacks in crypto history, with approximately 120,000 BTC stolen (valued at ~$72 million at the time). Instead of closing or abandoning users, Bitfinex chose to:

• Issue BFX tokens representing the loss, distributed to all affected users.
• Subsequently buy back all BFX tokens with real money, fully refunding 100% of the lost assets in just 8 months.

This handling helped Bitfinex maintain its reputation in the community, and is still considered a rare example of "responsible crisis management" in the crypto industry.

Current Position and Influence

Although no longer holding the #1 position as before, Bitfinex remains one of the exchanges with the highest liquidity, especially in trading pairs involving USDT and large volume (whale trading) activities. Additionally, Bitfinex is expanding into:

• Tokenization of real assets (RWA) through Bitfinex Securities
• Layer 2 applications (Keet) and private communication solutions (Holepunch)
• Supporting Lightning Network, accelerating ultra-fast and low-cost BTC payments

Bitfinex was also the first exchange to list many new tokens from the expanded Bitcoin ecosystem, such as ORDI, RUNE, STBTC, and is a liquidity center for assets linked to Tether like EURT, XAUT (digitized gold), MXNT, CNHT.

Conclusion

Bitfinex is not just an exchange, but part of a complex crypto empire centered around Tether. Despite going through many challenges, from a historic hack to legal controversies with authorities, Bitfinex has survived and plays a crucial role in the global liquidity system of the cryptocurrency market.

In a world where trust is fragile, Bitfinex and Tether can be seen as a model of both suspicion and extraordinary survival - two opposing sides, but coexisting in the development history of Crypto.