ING Group Reveals Scrutinized Crypto Exchange Bitfinex Has Account With It

  • Dutch bank ING says Bitfinex has an account there
  • Bitfinex had no known banking since it ended its relationship with Wells Fargo last April
  • iFinex, Bitfinex's parent company, also owns Tether, who issued 2.2 billion tokens pegged to the US dollar

In a twist for the cryptocurrency ecosystem, Dutch financial services company ING Group recently revealed cryptocurrency exchange Bitfinex, under CFTC scrutiny, has a bank account with it in the Netherlands.

Bitfinex is currently one of the biggest cryptocurrency exchanges by trading volume, and its parent company, iFinex, also owns Tether, a company that issues USDT tokens, supposedly backed by the US dollar at a 1:1 ratio. Last year, Bitfinex lost its relationship with Wells Fargo, and USDT token issuance rapidly increased shortly after.

Soon, critics started claiming Tether’s tokens weren’t actually backed by US dollars, as Bitfinex didn’t provide any proof of its reserves. Critics like Bitfinex’ed even suggested Tether was set up as a scheme to pump bitcoin, so Bitfinex could recover from losses it suffered when it was hacked back in August 2016 for 120,000 BTC. At press time, there are currently 2.2 billion USDT in circulation and subpoenas  have been sent to Tether and Bitfinex by the CFTC.

According to Reuters a spokesman for Amsterdam-based ING, Harold Reusken, revealed that Bitfinex was a customer at the bank, but didn’t comment any further citing customer confidentiality.

Resuken further revealed the bank does more due diligence when working with cryptocurrency transactions. He said:

“With companies that are active in the crypto market we are very reserved. Not with companies that are in traditional markets and receive or do payments with cryptocurrencies, but with parties that are in the chain of cryptocurrencies.”

Harold Resuken

Bitfinex hasn’t been willing to identify any banks it’s been working with, for unclear reasons. These could range from privacy and security issues, to ensuring authorities stay away from the funds, as suggested by BitMEX Research.

Last year, documents posted online seemingly showed Bitfinex had an account at Poland’s Bank Spoldzielczy, although at the time a bank official refused to reveal whether or not the exchange had an account there.

Two members of parliament in the Netherlands have asked the country’s finance minister for clarification on ING’s involvement with Bitfinex, after Dutch news outlet Follow The Money published a report on the relationship between both organizations.

The US Commodity Futures Trading Commission (CFTC) notably subpoenaed Bitfinex and Tether on December 6, presumably because of its silence on the issue. Presumably because of the growing voice of concern from the crypto community and their unanswered questions surrounding the realness of the USD reserves and the legitimacy of their banking partners.

Overstock CEO Sells Shares in His Company to Invest in Blockchain Projects

Patrick Byrne, the chief executive officer of (OSTK), has recently lashed out at investors who questioned his sale of 900,000 of his ‘founders shares’ in the company. Justifying his move, he revealed he needed the funds to invest in blockchain projects.

According to Business Insider, Byrne recently sent a letter to shareholders after the company’s stock prices plunged over 21% this week to their lowest since 2012, after he revealed he sold 500,000 of his shares earlier this week.

On Friday, the CEO revealed he sold an additional 400,000 shares, meaning he sold over 15% of his stake in the company. Although Overstock’s shares recovered on Friday, May 17, Byrne’s letter to shareholders was notable. In it, he wrote:

I simply had to supplement my nominal salary with stock sales in order to fulfill personal commitments to invest personally in blockchain projects such as Medici Land Governance, along with a need to meet charitable pledges.

The CEO added that he doesn’t plan on giving such an explanation again, justifying that he owes shareholders “staying within the law and not making decisions based on inside information, not explanations of my life and projects outside Overstock.”

He noted that the “unanticipated stir” caused by his sale was unexpected, and added “I had no idea that shareholders would demand explanations of why and how I might want to use my cash derived from my labor and my property to pursue my ends in life.”

Byrne is notably Overstock’s largest shareholder, and noted he told investors a year ago he would be making “significant sales” to fund different projects, including those related to blockchain technologies and, presumably, cryptocurrencies.

In fact, the libertarian sold 775,000 of his shares in September of last year, before this week’s sale. The stock’s price has fallen roughly 90% from its record high in January of 2018, when Overstock was benefitting from its cryptocurrency ventures and accompanying the cryptocurrency market’s performance.

In November of last year, Byrne revealed he had plans to sell Overstock’s retail business and go “all-in” on cryptocurrencies and blockchain technology. The CEO’s plan would see the company focus on its fully-owned subsidiary Medici Ventures, which has been invested in blockchain-related startups, after selling its retail business.

Overstock's price performance over the last two yearsSource: Yahoo Finance

Byrne has notably been battling short sellers targeting Overstock, as the firm competes with the likes of eBay and Amazon. Financial analytics firm S3 Partners has estimated short bets against it stand at $157 million, or 50% of its float. This makes it more targeted by short sellers than 99% of companies in the U.S.

Despite the company’s performance on exchanges, Overstock has since launched its tZERO security trading platform, and was one of the first companies to pay a “portion” of its taxes using bitcoin in Ohio.