In which Bitfinex makes it very explicit that they are going to operationalize something I suspected they already did artisanally: using Tether for crypto-hawala.
This... this will not end well.
This... this will not end well.
Essentially what they're doing is attempting to match deposits and withdraws. In lieu of sending them money, they ask you to deposit money with another customer of theirs attempting to withdraw money.
This keeps them off of the AML/KYC payments graph at their banks.
This keeps them off of the AML/KYC payments graph at their banks.
"Ahh that's brilliant, why didn't anyone think of it before."
They did. It was called LibertyReserve and the principals are currently in prison.
en.wikipedia.org/wiki/Liberty_R…
They did. It was called LibertyReserve and the principals are currently in prison.
en.wikipedia.org/wiki/Liberty_R…
This is a tremendously bad idea from an operational perspective as well, because one is very unlikely to be able to successfully match inflows and outflows during all market conditions, exacerbating the liquidity problems.
