Converting crypto to fiat is not cheap anymore, at least on Bitfinex.
The Hong Kong-based digital assets exchange on Sunday updated its fee structure for high-frequency wire withdrawals. It effectively imposed a 3 percent commission cut on all external wire withdrawal requests that would exceed 1) more than two fiat withdrawals in any thirty day period, and 2) more than $1M in aggregate in fiat withdrawals in any thirty day period. Meanwhile, the latest fee structure will not affect low-frequency wire withdrawals which, according to Bitfinex, constitutes 99% of their customers.
The update nevertheless has brought the fee tariffs of Bitfinex close to the ones charged by PayPal. According to SalesCalc, an independent fee calculating service, a user would pay circa $29,000 in fees if s/he wants to transact $1 million. Bitfinex, at the same time, would charge an additional $1,000 for wiring the same amount.
The community, for obvious reasons, didn’t receive the Bitfinex update so well, with some even accusing the exchange of intentionally locking the users’ funds. A comment interestingly highlighted how exchanges had dented the idea of financial freedom by acting like banks.
“Crypto… amazing for “freedom” of money… until you realize we essentially added an additional f***ing layer of middle-men to the process via exchanges. Exchanges are the “banks” of crypto… and they’re making a killing… just like banks do.”
Some comments theorized the Bitfinex announcement as a plot to raise the premium of their partner stablecoin Tether. People willing to come out of Bitfinex would like to do so via crypto. That means the value of Bitcoin and USDT will likely increase artificially on the exchange due to high demand.
I dont know why they think it’s a good idea to implement this while the confidence in USDT has been dwindling.
Bitfinexed must be laughing so hard now. They are killing themselves
— Squeeze (@cryptoSqueeze) November 12, 2018
Another trader said:
It seems they just don’t want their users to cash out with Fiat, I wonder, how are the crypto widthdrawals are those ok? if that’s the case BTC will rise a little but due to people exiting their cash for BTC on Bitfinex
— Sebastian Velandia (@BastianVelandia) November 12, 2018
Plenty of Bitfinex users are already storming the social network with complaints about the exchange’s withdrawal process. Many have posted copies of their claims on forums, revealing how their withdrawal requests have not been closed despite several requests. Redditor krJq333, for instance, has accused Bitfinex of holding his GBP funds for over four-weeks already.
“The support I’ve received from Bitfinex this week has been nothing short of abysmal,” he wrote. ” Does Bitfinex have any idea how much stress and anxiety they’re causing their customers here?”
Just last month, a whale who traded over 100 million dollars worth of crypto-assets on BitFinex had complained about not being able to move his funds.