Wells – Idelto

22 months since Wells Fargo suspended the processing of withdrawals sent by four Taiwanese banks that service Bitfinex, the platform remains among the top 20 exchanges by adjusted volume. While Bitfinex hosted more than $5 billion in trade this past month, the exchange has struggled to establish reliable banking partners, with traders seeking to deposit fiat currency having been instructed to send funds via at least seven different banking institutions since the Wells Fargo suspension.

Also Read: Van Eck Associates CEO: Bitcoin Investors Will Add Gold This Year

Bitfinex Directs Customers to Deposit Funds With Polish Bank 7 Months After Wells Fargo Termination

During Nov. 2017, it was reported that Bitfinex customers were being directed to deposit fiat currency with Polish-based bank Spółdzielczy w Skierniewicach under the account of Panama-based company Crypto SP, an account that was also revealed to be shared with cryptocurrency exchange CEX. Crypto SP was also found to be owned by Crypto Capital, a company owned by Ivan Manual Molina Lee, an individual found to be a nominee director for a number of Panama-based companies.

During January 2018, it was reported that Bitfinex had been subpoenaed by the United States Commodity Futures Trading Commission (CFTC). The months following the news of the subpoena saw Bitfinex appear to cycle through banking partners in short succession, with traders being instructed to make fiat deposits with at least six different financial institutions between Feb. 2018 and Nov. 2018.

Bitfinex Customers Directed to Deposit Funds With at Least 6 Banks During 2018

At the start of Feb. 2018, a post on Reddit indicated that a Bitfinex customer had been directed to deposit funds with Portuguese-state owned banking institution Caixa Geral De Depositos via a company called Global Trade Solutions. One Redditor speculated that Global Trade Solutions may be linked to Crypto S.P and Crypto Capital.

On Feb. 14, 2018, Dutch media outlet Follow the Money reported that a spokesperson for ING had confirmed that Bitfinex held an account with the bank in the Netherlands. The news comprised the first announcement of a major financial institution since Wells Fargo suspended wires from Bitfinex almost one year prior.

Bitfinex Briefly Partners With Noble Bank

During May 2018, it was reported that Bitfinex had partnered with Puerto Rican financial institution, Noble Bank whose principal custodian was Bank of New York Mellon.

Three months later, a report published on Medium asserted that Brock Pierce, the founder of Tether, and John Betts, the founder of Noble Bank, had sought to acquire Mt. Gox together in 2014 via Sunlot Holdings’ Mtgox Rehabilitation Plan Proposal. After their bid was unsuccessful, both men would go on to found their respective companies later that year.

At the start of October 2018, it was reported that Noble International had been looking for a buyer for months, and had lost many of its customers including Bitfinex and Tether. A few days later, it was revealed that Bitfinex was directing customers to deposit fiat currency into an HSBC account held by Global Trading Solutions.

Later that month, reports also indicated that Bitfinex was banking with Hong Kong-based Bank of Communications via the private accounts of “Prosperity Revenue Merchandising Limited” for whom Citibank acts as an intermediary bank.

In November, Bitifinex announced another new banking partner, publishing a letter attributed to Bahamas Deltec Bank & Trust asserting that the company held $1.8 billion in its account as of Oct. 31.

Bitfinex’s Cayman-Based Bank Falsely Claims SEC Registration

During January 2019, it was revealed that Bitfinex was banking with Cayman Islands-based Sackville Bank & Trust Company. Sackville’s principal custodian bank is CIBC Mellon which is jointly owned by The Bank of New York Mellon and Canadian Imperial Bank of Commerce.

While discussing Wells Fargo’s suspension of wire transfers to and from Bitfinex, the exchange’s former chief strategy officer, Phil Potter, previously stated: “We’ve had banking hiccups in the past, we’ve always been able to route around it … open up new accounts … shift to a different entity, lots of cat and mouse tricks.”

What do you think of Bitfinex’s perpetual banking drama? Share your thoughts in the comments section below!

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Hydro-Quebec Considers Halting Mining Operations During Winter

The migration of cryptocurrency miners to hydro-power abundant Quebec has been received cautiously lately, following an initial period over-exuberance on the part of local officials. The future for Quebec’s mining industry has since encountered a number of hurdles, from the province’s ability to supply power during the dry winter season to the often overlooked environmental tolls of producing hydropower.

Also Read: The Number of Cryptocurrency Exchanges Has Exploded

Hydro-Quebec Considers Suspending Power Provision to Mining Companies During Dry Season

In recent months, the Canadian province of Quebec has sought to attract cryptocurrency miners, offering up cheap and abundant hydropower.

After initially boasting 5000 megawatts of surplus electricity, the province’s state-owned power company, Hydro-Quebec, has since taken a more cautious approach with regards to encouraging the proliferation of Quebec-based mining operations, after reconsidering its ability to satiate demand from both citizens and miners during the dry winter season.

Marc-Antoine Pouliot, a spokesperson for Hydro-Quebec, has described the dry season as the principal barrier to Hydro-Quebec’s capacity to meet the constant energy draw produced by miners, recently proposing that sanctions are placed on mining companies during winter.

“In Quebec, residential customers heat their homes with electricity. [As a] consequence, the demand can be very high when the temperature is below -20°C for a few days. We are now analyzing the effect of the [mining industry] on our winter peak. One of the solutions could be to oblige blockchain companies to suspend the activity during the winter.”

Canadians Concerned About Ecological Toll of Increased Power Consumption

The Massachusetts Institute of Technology (MIT) has published an article claiming that the purportedly modest ecological footprint generated through Quebec’s power production has come under increasing scrutiny. Jeff Wells, a conservation biologist and researcher at Cornell University, has also warned of the potential environmental consequences of increased miner activities, emphasizing the ecological strains incurred through the construction of dams.

Mr. Wells asserts that the damage created by constructing the reservoirs required to hold a ready supply of water is too great to justify any industry. Mr. Wells asserts that said reservoirs are increasingly overtaking existing forests and leading to the large-scale rotting of tree roots, which results in the release of significant quantities of methane. “You’re putting hundreds of thousands and eventually millions of acres under water. You’re putting a greenhouse gas in the atmosphere and stopping the ability of that area to take any more carbon into the system. You’ve lost a whole ecosystem.”

Mr. Pouliot has sought to assure that the company’s ability to meet demand during the peak of winter is the sole hurdle posed by the proliferation of industrial-scale mining operations. The spokesman has dismissed ecological concerns, asserting that full environmental impact assessments are completed before any dams are constructed by the Hydro-Quebec.

Canadian Company Creates Modular Mining Apparatus

Canadian startup company, K.E. Inc., has developed self-contained modular shells designed to accommodate up to 1,200 cryptocurrency miners. The company’s founder, Fooad Nejad, has asserted that a recirculation ventilation system reduces power consumption through eliminating heating and cooling requirements.

The pods resemble shipping containers, however, and can be constructed virtually anywhere without requiring retrofitting and other costs associated with establishing mining operations in old buildings. The pods can also be adapted to channel heat production, with Mr. Nejad predicting that the pods may in future be used to grow warm-weather crops year round.

Despite efforts to reduce the ecological footprint incurred through mining, Christian Catalini, associate professor of technological innovation at MIT and founder of MIT’s Crypto-economics lab, has argued that the energy-intensive nature of cryptocurrency mining is a consequence of the fundamental lack of trust between the participants of a transaction.

“You’re essentially solving worthless puzzles that we cannot solve mathematically. You can only brute-force your way into it, Mr. Catalini said. “Basically, you’re placing an economic cost between a user and an attacker. If someone wants to subvert the system by faking a transaction, or revert a legitimate transaction, they would have to expend a tremendously high amount of energy and computation – to the point that no rational economic actor would do that, because the cost of doing an attack would be far greater than the benefit.”

Do you think that the honeymoon period is over between Hydro-Quebec and cryptocurrency miners? Share your thoughts in the comments section below!

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