What is Bitfinex?
Supporting an ecosystem filled with a plethora of trading options or cryptocurrency products, Bitfinex is among the most popular exchanges out there. Bitfinex’s set of features, including margin accounts, spot trading, paper trading, and more, can be ideal for both expert and beginner cryptocurrency investors. This is also highlighted in its vision, which is clearly outlined: to become the leading proponent of freedom by hastening the shift to a world that is fairer and more open.
Where is Bitfinex located?
Founded in 2012, Bitfinex is currently based in Hong Kong. However, it also claims Taiwan and Taipei as its headquarter locations.
Who created Bitfinex?
The exchange was founded by Giancarlo Devasini and Raphael Nicolle. And, much like Tether, it is an iFinex, Inc. subsidiary, which is a British Virgin Islands-based firm.
Bitfinex Hack
During the mid-2010s, Bitcoin had become a means for tax evaders, drug dealers, speculators, libertarians, and all sorts of bad actors to transfer funds throughout the world while eluding the notice of conventional financial institutions. Although the cryptocurrency is decentralized, its unregulated nature serves as an aspect of its appeal. It was because of traits like this that the cryptocurrency was more vulnerable to attacks. And this is where Bitfinex’s hack comes into play. Taking place in 2016, it led to the most significant financial seizure in the US Department of Justice’s history.
How did Bitfinex get hacked?
Two individuals pop into mind when this hack is concerned: Heather Morgan and her husband, Ilya Lichtenstein, who were arrested in Manhattan in early 2022.
According to certain court documents, after a hacker broke into Bitfinex’s servers and conducted more than 2,000 unlawful transactions, Lichtenstein and Morgan allegedly planned to launder the earnings of 119,754 bitcoin looted from the exchange’s platform. The stolen bitcoins were then sent to a virtual wallet belonging to Lichtenstein through those unlawful transactions. Throughout the previous five years, around 25,000 of those bitcoins were taken out of his wallet through a complex money laundering procedure that concluded with a few of the stolen bitcoins being deposited within financial accounts managed by Morgan and Lichtenstein.
The funds that were left, composed of over 94,000 bitcoins, remained within the wallet utilized for receiving and storing the illicit proceeds from that hack.
How did Bitfinex hackers get caught?
After the court authorized the issuance of search warrants for online accounts managed by Morgan and Lichtenstein, special agents acquired access to files inside an online account owned by Lichtenstein. Such files had the private keys needed to access the virtual wallet that received Bitfinex’s stolen funds. This allowed the special agents to lawfully secure and recover over 94,000 stolen bitcoins.
The criminal complaint claimed that Morgan and Lichtenstein employed several sophisticated laundering methods, such as using fake identities to create online accounts, using computer programs for transactional automation, and much more.
Feds seize billion Bitcoin from Bitfinex
The couple had initially stolen around 120,000 bitcoins, worth $4.5 billion. Fortunately, the Justice Department was able to reclaim $3.6 billion of that sum.
Is Bitfinex safe?
Bitfinex utilizes many standard industry methods for maintaining the safety of users’ accounts and their funds. These include withdrawal protection features, cold storage of users’ assets, sophisticated APIs for integrating third-party services, two-factor authentication (2FA), and universal second factor (U2F).
Moreover, they actually make it necessary for users to set up both 2FA and U2F prior to doing anything on their exchange. Furthermore, only 0.5% of funds are held in hot wallets, implying that even if hackers are successful, they do not have as much to access. Then, they monitor their users’ IP address activity to look out for irregularities as well.
In terms of safety, it is good in the aspect that Bitfinex has learned from its past.
Pros and Cons of Bitfinex
Bitfinex does have a few things going for it. These include its low trading fees, the mobile application, and paper trading that are alright for newer cryptocurrency traders, its support for margin trading, advanced orders, and derivatives order types, and its good security and cryptocurrency selection.
As for its slips, these include its history, which has had fines and regulatory missteps; its questionable involvement with Tether; and the fact that it is inaccessible in the US.
How to use Bitfinex
If you want to see what the exchange has to offer, you will have to sign up first.
1. Getting onboard
Visit the Bitfinex webpage, and then select the “Sign Up” option towards the right. Choose a username, enter your email address, think of a password, accept the terms, choose the time zone you are in, then enter the captcha prior to clicking “Open Account.” After that, check your mail and verify your account through the email that was sent.
2. Secure your account
After your account has been confirmed, you can finally log in. However, before you start trading, as mentioned previously, you have to secure your account by setting up U2F and 2FA. Then, you will have to fund your account via any one of the ways that are listed, and if you desire to fund your account through a bank wire, you will need to complete the KYC process on the platform.
3. Start trading
Once you have secured your account or have done everything mentioned so far, you can start using Bitfinex and see what it has to offer.
How to buy Bitfinex’s token
Although there are several exchanges where you can buy this token, for this guide, we will be looking at Coinbase. As of now, UNUS SED LEO is not accessible on its centralized exchange. However, it is still available for purchase on Coinbase Wallet. So, here is how you can do so using the Coinbase Wallet.
1. Download and choose your username
The Coinbase Wallet, which is a self-custody wallet, is needed to buy UNUS SED LEO. Once you have downloaded it, you will need a username, which will allow other users to easily transfer cryptocurrency to your address.
Safeguard your recovery phrase
You will be handed your very own recovery phrase that is composed of 12 random words. This phrase serves as the key to your cryptocurrency, so store it safely somewhere and do not share it with anyone.
Set some funds aside for network fees
Fees differ depending on network traffic, how complex the transaction can be, or how quickly you would like it to be completed. So, set some funds aside for any fees you might incur on Ethereum.
Purchase ETH and transfer it
If you do not already have a Coinbase account, you will have to create one before you can purchase Ethereum. Also, the manner in which you will transfer your ETH depends on whether you are using the Chrome extension or the mobile application.
Use ETH to purchase UNUS SED LEO
After you have added ETH to your wallet, you can swap it for the token, either in the mobile application or browser extension. And remember to leave some funds for transaction fees when you swap. After that, you can confirm the swap and follow the on-screen instructions to finalize it.
Trading in Bitfinex
Bitfinex allows users to trade more than 160 assets with minimal slippage. Its services are state-of-the-art, with all the markets and advanced order types—something that liquidity providers and cryptocurrency traders can delight in.
This array of tools and order types can encourage traders to utilize their desirable strategies in every situation, which also includes algorithmic order management.
Margin trading and funding
Users can trade with 10x leverage through the peer-to-peer margin funding platform. They can also submit their own funding orders to borrow the amount they want at the desired rate and duration, or automatically, the best possible funding rate is sorted for the position.
The margin funding market here offers a safe way to receive interest on virtual assets and fiat by offering to fund traders who desire to trade using leverage. Users can provide funding across various cryptocurrencies or assets at the duration and rate of their choice.
Paper trading
The paper trading feature enables traders to test their trading strategies within a simulated environment with no need to deposit actual funds. It can work on sub-accounts that emulate the trading functionalities of the master account.
Bitfinex Honey
It’s no longer just the domain of specialized algorithmic trading organizations to create customized event-driven, automated trading methods and custom order types. Bitfinex has made such strategies more accessible to its users via the Bitfinex Honey integration. In addition, the most recent development has made things simpler to utilize, as one does not require any developer know-how or coding knowledge.
Bitfinex fees and deposit methods
The maker fee at Bitfinex is 0.100%, while the taker fee is 0.200%. However, these can change depending on the type of order and the amount spent. Withdrawal fees depend on the type of cryptocurrency or method. Also, you can fund your account with credit or debit cards, cryptocurrencies, bank transfers, or even Tether tokens.
