Overview

Bitfinex is a cryptocurrency exchange owned and operated by iFinex Inc, and is registered in the British Virgin Islands and regulated in El Salvador. Bitfinex was founded in 2012. It was originally a peer-to-peer bitcoin exchange, and later added support for other cryptocurrencies. Bitfinex was one of the first professional platforms built for cryptocurrency trading. Bitfinex is the world's second-largest exchange by number of bitcoins held in its digital wallet, and is estimated to have about 403,000 bitcoins. It has 1.6 million users.

In 2025, it announced the implementation of zero trading fees for all spot, margin, and derivatives trading on its platform.

2012: Early history

Bitfinex was founded in December 2012 as a peer-to-peer (P2P) bitcoin exchange offering digital asset trading services to users worldwide. Bitfinex initially started as a P2P margin lending platform for bitcoin and later added support for more cryptocurrencies. It was one of the first professional platforms built for cryptocurrency trading.

Raphael Nicolle, an IT technician from Paris, launched Bitfinex following a previous project called Bitcoinica. He continued to work as a developer for the platform until the beginning of 2017. Bitfinex was designed to offer high-volume trading and both spot and derivatives products, including exchange trading, margin trading, margin funding (P2P lending), over-the-counter markets, and derivatives trading.

2015–2016: New partnership and security breach

In 2015, Bitfinex partnered with Palo Alto company BitGo to offer highly-secured wallets that allow people to store their digital currencies online. BitGo has insurance against bitcoin theft. In May 2015, the exchange was hacked, which resulted in the loss of 1,500 bitcoins or about $400,000 USD of their customers' assets. In June 2016, the U.S. Commodity Futures Trading Commission ordered Bitfinex to pay a $75,000 fine for offering illegal off-exchanged financed commodity transactions.

The order also found that Bitfinex violated the Commodity Exchange Act by not registering as a Futures Commission Merchant.

2016 hack

In August 2016, Bitfinex announced it had suffered a major security breach. Immediately thereafter, bitcoin's trading price plunged by 20%. After learning of the breach, Bitfinex halted all bitcoin withdrawals and trading. In that hack, the second-biggest breach of a bitcoin exchange platform, 119,756 units of bitcoin, worth about $72 million at the time, were stolen. The bitcoin was taken from users' segregated wallets, while Bitfinex said it was tracking down the perpetrators of the hack.

Exchange customers, even those whose accounts were not broken into, had their account balance reduced by 36% and received BFX tokens in proportion to their losses. All users who kept their BFX tokens were reimbursed in full within eight months of the hack in April 2017. The exchange's access to U.S. dollar payments and withdrawals was then curtailed. The hack happened even though Bitfinex was securing the funds with BitGo, which uses multiple-signature security.

The U.S. Department of Justice recovered the stolen bitcoin, and a New York couple, Ilya Lichtenstein and his wife, Heather R. Morgan, was federally charged in February 2022 with conspiring to launder the bitcoin, which was then worth $3.6 billion. According to Justice officials, Lichtenstein and Morgan are charged with conspiracy to launder money and conspiracy to defraud the United States. On February 10, 2022, it was reported that Morgan was detained in Manhattan on February 8, 2022, with her husband.

According to court records, Lichtenstein and Morgan appeared for a plea hearing on August 3, 2023, in Washington, D.C. They were charged in the case with a document known as an information, which is a type of charging document that federal prosecutors typically use when defendants have agreed to plead guilty.

Since Lichtenstein and Morgan's arrests, the government seized another $475 million tied to the attack. In August 2023, Lichtenstein pleaded guilty to a conspiracy to launder stolen cryptocurrency in Washington, D.C. Morgan also pleaded guilty to two charges, money laundering conspiracy and conspiracy to defraud the U.S. government. The value of the stolen bitcoin ended up being worth $4.5 billion. Lichtenstein also admitted to being the original hacker of bitcoin in the 2016 cyberattack on Bitfinex.

In November 2024, Lichtenstein was sentenced to five years in a U.S. prison for his involvement in money laundering the stolen bitcoin. Morgan was sentenced to 18 months in prison for fraud and conspiracy charges.

2017–2018: Banking changes

In April 2017, Bitfinex announced it was experiencing delays in processing USD withdrawals after Wells Fargo cut off its wire transfers. Shortly after the Wells Fargo cutoff, Bitfinex stated all international wires had been cut off by its Taiwanese bank. Since then, Bitfinex has moved between a series of banks in other countries without disclosing to customers where the money is kept. Noble Bank International of San Juan, Puerto Rico, reportedly handled some dollar banking for the exchange in 2017 or 2018.

The banking relationship was reportedly terminated in September 2018 as Noble Bank encountered financial difficulties.