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.”
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.