How Bitfinex strong armed me

June 28, 2017

I’d like to share with you my horrific experience I had with Bitfinex.

I started depositing Ethereum and trading with Bitfinex on February 2017.

All went very well. I was doing great, trading my margin account.

Some days were awesome days, other days were not so well. I did have a few position liquidations that would send me back a couple of weeks, but all in all I really can’t complain. I managed to make the most out of my leveraged account, in response to Ether and Litecon skyrocket-rise.

I had managed to reach my financial goal, and was getting ready to take some money off the table.

I wrote an email to Bitfinex regarding my options for an international wire-transfer out of my account. This was before the days when US banks stopped working with Bitfinex. Wire Transfers were common at these days.

April 5th through April 7th I had an email exchange with Bitfinex regarding withdrawing money out of my account.

April 7th at noon-time, there was a Litecoin price drop. Nothing that didn’t happen before.

I was forced into a position liquidation. This has happened to me a few times before. No biggie. It should set me a couple of weeks back.

Only that this time it didn’t. This time Bitfinex cleaned out my account. Completely. Entirely.

Bitfinex took 8218 Ethereum from my account. These were coins that I had in my margin account. I am not talking about the position which was borrowing against creditors. The position was closed, and my Ethereum had mysteriously disappeared from my margin wallet within a split second.

If I may add, my position loss was minuscule. Up to a few minutes before the liquidation my position was in the black.

Normally the position should have been sold at market price, and any debt to the creditors plus losses of the position should have been deducted off my margin wallet.

But not this time. This time Bitfinex didn’t release my position to the market. Bitfinex closed my position, took all of my margin account coins, and released the position gradually, in order to prevent a down-spike on their exchange.

The only logical deduction to be made here is that they knew I was about to take some money off the table, and decided to greedily and unlawfully wipe out my account.

This was a quiet Friday after-noon. When I contacted support, (I was certain it was an innocent mistake which they will fix in an instance) it took them a few days to respond. When they finally got back to me, they said the position was too large to put on the book, and according to their calculation the book would have reached 3USD because of my litecoin position, which would have left me with nothing at all. That’s why they decided to confiscate my leveraged account, with all my securities.

On the one hand, by slowly releasing my position, they guarded their book, thus protecting other clients. On the other hand, they charged me as if the position did hit the book, and as if the book price dropped to near 0$USD, which it never has.

Obviously someone has unlawfully benefited and unjustly enriched themselves from my loss of funds, balanced at the time at 8,200ETH

I tried to reason with them, and to show them how the price of LTC never dropped under 9.5USD at that day. I tried to reason with them. I really did.

I tried to show Bitfinex their wrong-doing. I tried to settle with them. They wouldn’t take any responsibility over their actions. Complete denial of responsibility.

But nothing. I assume the greed was blinding them.

That is my story.

This is how Bitfinex confiscated my coins.

I’d like to implore you not to hold a large account with Bitfinex, and to never tell Bitfinex of your intention to withdraw your money.

If you had a similar experience with Bitfinex, you can join a class-action Lawsuit I am organizing against Bitfinex here
 https://goo.gl/forms/xSTOF6etsfvP3HQh2

Yours truly

Guy Eden

Bitfinex former customer

Edenguy @ gmail.com