Bitfinex – the world’s fifth largest cryptocurrency exchange platform – is potentially leaving Asia and heading for Switzerland. Representatives say they are eager to find a single spot where they can bring all their operations together instead of having them spread over “several locations.”
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The company has already engaged in several meetings with the country’s top officials to get an idea of national laws pertaining to finance and cryptocurrency regulation. Bitfinex says it is also considering London, U.K. as a secondary option.
Bitfinex is headquartered in the British Virgin Islands but has various operations based in different Asian countries. A major hack in 2016 and problems maintaining stable banking relationships in Asia have led it to seek a more stable business environment.
European Tech Arena Grows
Switzerland has become a global hub for blockchain and digital currency enterprises. The trend began four years ago when Zurich set up its first bitcoin ATM. Near Zurich is the small town of Zug, which reportedly offers one of the most “business-friendly taxation schemes” witnessed today. The area has long been a haven for commodity trading groups and million-dollar investment firms.
Nowadays, Zug is known as the capital of “Crypto Valley” thanks to its growing tech innovation, which has ultimately been drawing in blockchain and cryptocurrency startups since 2016. The area has served as the primary base for four separate initial coin offerings, and currently houses over 200 separate blockchain companies.
Business Just Keeps on Coming
In addition, Zug also accepts cryptocurrency payments for both council services and local taxes.
The quiet and easygoing environment makes it the primary location for Bitfinex’s new headquarters, and CEO Jean-Louis Van der Velde says it holds the number one spot on their “go to” list. Granted all goes smoothly, Bitfinex and its parent company iFinex will become public limited companies in Europe.
iFinex is also the parent company of Tether, a token pegged in value to USD and used as a digital substitute for it. Many cryptocurrency advocates have come to doubt the intentions and legitimacy behind Tether; no external audit has ever been conducted on its claimed USD reserves, thus making Tether’s actual connection to the U.S. dollar questionable.
Both Bitfinex and Tether later received subpoenas from the Commodity Futures Trading Commission (CFTC), which according to Van der Velde, seriously put executives on edge.
“We want to be the most transparent of all exchanges and meet the requirements of the Swiss regulator,” he assured.
Bitfinex Following an ‘Exit’ Pattern From Asia
Bitfinex’s exit from Asia follows that of Binance, the world’s largest cryptocurrency exchange. With a daily trading volume nearing $2 billion USD, the company was recently hit by a warning letter from Japan’s Financial Services Authority (FSA), saying that it faced possible suspensions and other penalties if it did not obtain appropriate licensure to operate within the country’s borders.
The exchange has since announced plans to relocate to Malta, a European island nation just south of Sicily.
Is Bitfinex making the right move? Post your comments below.
Images via Bitfinex, Pixabay