Why you should not trust Bitfinex

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TL/DR: The founder of Bitfinex has a history of supporting ponzi schemes and the exchange was founded using stolen "swiss-cheese" source code. Read the first quote. Don't trust them.

There have already been arguments on here about whether or not Bitfinex is solvent in light of their recent and past issues, so I'll approach this from a different angle.

Take a look here at the first few posts in this thread. Here we see the founder of Bitfinex, "unclescrooge" – Raphael Nicolle, defending one of the biggest Ponzi scammers in Bitcoin's history and demanding apologies from those calling it out (he recently deleted the post itself, but it was quoted by the next person):


INow that Pirateat40 closed down his operatations thanks to all the fud that was going on and growing on the forum, I expect everyone that spreads this fud, accused and insulted Pirate and the people that supported him to apologize.

Not only did Pirate brought us a great opportunity for investors (once in a lifetime actually), he did help stabilise and grow steadily bitcoin price, volume exchange, and thus contributed to the success of bitcoin. For that, Pirate, I want to thank you. You've done a wonderful work, and I hope you're stay around here.

Now, apologies on.

Here's some background on the pirateat40 Ponzi scheme for those unaware:


So what does that mean? In the best case scenario, the founder of Bitfinex is a colossal moron who can't even identify a blatantly obvious ponzi scheme – and is certainly not someone you would trust with your money.

Worst case scenario, he knew what was going on and was looking for more victims to feed the scam – again, not someone who you would trust with your money.

Had I known about this history, I personally never would have put a dime on Bitfinex.

Here's some more info on the origins of Bitfinex – the gist of it is that the exchanged was bootstrapped on the stolen, leaked, bug-ridden source code of Bitcoinica (an exchange that itself was mysteriously "hacked" and all the money disappeared):


There's much more to dig into about the exchanges history of bugs, incompetence, and questionable actions (example: https://www.reddit.com/r/Bitcoin/comments/36uxxz/bitfinex_has_been_hacked/crhcaov/). Oh, and remember that the owners see no issues with trading on their own exchange. There are many ways to take advantage of privileged info (stops and liquidations, bfx token trading, etc.) if an owner is dishonest, let alone more serious possibilities of fractional reserve and gambling with user funds. Someone who has no issues with ponzi schemes probably has no issues with the above, either.

This is just the surface of issues discovered, others here have far more knowledge of the history of issues that I do.

And a final parting quote for the next time you hear someone accused of spreading "FUD" about Bitfinex – here's another "unclescrooge" quote about those calling out pirateat40 as a scammer:

Fuck everyone that spreads FUD. You could have made great profits while helping stabilising bitcoin price. Now back to scammers at 2% a week and great volatility that make bitcoin look like a laughing stocks.

Fuck you. At least now you'll look ridiculous, that's my only pleasure.


submitted by /u/halfjump
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247 BTC

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