Bitfinex Risk Warning | 120,000 BTC Stolen and Tether Faces Compliance Dilemma: Is It Still Safe?

1. Platform Background and Market Position

• Full platform name : iFinex Inc. (operating brand: Bitfinex)

• Founded : 2012

• Place of registration : British Virgin Islands

• Official website : https://www.bitfinex.com

• Market position : Bitfinex is a "veteran giant" in the crypto industry. From 2017 to 2019, it was the world's number one platform in terms of trading volume.

However, with the rise of Binance, Coinbase and others, Bitfinex's market share has gradually shrunk, and in recent years it has relied more on the USDT ecosystem to maintain its influence.

2. Major Hacking Incidents in 2016

• Date : August 2016

• Scale of loss : approximately 120,000 bitcoins (worth $72 million at the time, more than $7 billion in 2025 terms).

• Disposal method : Bitfinex will distribute the losses proportionally to all user accounts and issue BFX tokens as a compensation tool.

• Recovery status : In 2022, the U.S. Department of Justice recovered some of the stolen bitcoins, but the losses of most users could not be fully compensated.

👉 Reference: Bloomberg

3. Tether (USDT)-related risks

• Bitfinex and Tether share the same parent company, iFinex Inc.

• It has been repeatedly accused of commingling funds , meaning that user funds are intertwined with Tether reserves.

• In 2021, the New York Attorney General (NYAG) accused Bitfinex and Tether of concealing an $850 million funding gap , and eventually reached a settlement of $18.5 million .

• In 2025, after the EU MiCA regulatory framework is tightened, Tether may be restricted in the European market, indirectly affecting Bitfinex.

IV. Recent User Feedback and Market Confidence

• User concerns : Investors on Reddit are still questioning whether Bitfinex is truly independent of Tether.

• Trading activity : Large investors remain active, but the number of retail investors has decreased.

• Withdrawal issues : There has been no large-scale freeze at present, but there are occasional delayed feedback on withdrawal speeds.

V. Current Status of Supervision and Compliance

• It does not hold major financial licenses from the United States, the United Kingdom, or the European Union ;

• Named by regulators in multiple countries :

• The U.S. CFTC once fined Bitfinex $7.5 million;

• The EU is strengthening its supervision of Tether, which may affect Bitfinex;

• Some Asian markets, such as Japan, have banned it from providing services directly.

VI. Risk Warning and Investment Advice

Investment advice :

• Be cautious with Bitfinex, especially avoid long-term custody of large amounts of funds;

• If used, it is recommended to limit it to small transactions;

• Investors should prioritize platforms with higher regulatory compliance (such as Coinbase, Kraken, and some Binance markets);

• It is recommended to use cold wallet storage to reduce the risk of concentration.

VII. Conclusion

As one of the oldest exchanges in the crypto industry, Bitfinex has a rich history, but its 2016 hacking incident and the Tether funding controversy remain an indelible shadow.
Even though the platform is still operating, its lack of compliance and financial transparency has kept it on the high-risk list for a long time.

⚠️Final Conclusion : Bitfinex has a high risk level and is not recommended as a primary asset custody channel. It is only suitable for short-term, small-scale operations.