Bitfinex seems to be banking in the Cayman Islands
Bitfinex appears to have banking with Sackville Bank & Trust in the Cayman Islands, famous for its offshore banking secrecy. Below are some details of a recent international wire transfer from Bitfinex to a trader, presumably through a US intermediary bank:
However, the extent of the relationship between the two firms is unclear, and will likely remain so due to banker/client confidentiality. Bitfinex has had a long history of obtaining banking services through third parties and their shell company accounts.
Sackville Bank holds a Category “B” license, which allows it to conduct banking operations only with non-residents, or with another licensee registered and regulated in the Cayman Islands. There is no deposit guarantee scheme in the Cayman Islands, so in the event of a bank failure, depositors would not receive any compensation.
Sackville’s primary global custodian bank is “CIBC Mellon,” jointly owned by The Bank of New York Mellon and Canadian Imperial Bank of Commerce. BNY Mellon also provided custodial services to Noble Bank International, before dropping them. It is speculated to be the reason why Bitfinex and sister company Tether moved funds away from Noble last summer. CIBC froze $28-million CAD from a payment processor for Canadian cryptocurrency exchange Quadriga last year, because “it was unable to determine the rightful owners of the funds.” The funds have since been released.
Interestingly, Sackville claims on their website that they have “full registration with US Securities and Exchange Commission,” but according to the SEC, Sackville’s registration was terminated last April:
Despite this newfound arrangement, Bitfinex banking still looks to be unstable, as evidenced by book entry US dollars trading at a stubborn 3–4% discount on Bitfinex, along with a laundry list of social media complaints from users unable to withdraw actual fiat money.
“My last express withdrawal has been canceled again, and my account has been terminated,” a former customer, Alan Chang, told me recently. “Maybe I complained too much on Reddit,” he added (going by the handle alan_ce).
“If they don’t allow fiat withdrawal, just announce this. Now they are terminating users who request fiat withdrawals. I’d say five people who directly contacted me were terminated, so there should be more.”