Bitfinex

Bitfinex is a centralized cryptocurrency exchange built for active and professional traders rather than first-time buyers. Founded in 2012, it offers spot trading, margin trading with a peer-to-peer funding market that lets users lend to leveraged traders for yield, over-the-counter desks, and a derivatives platform. Its interface and order types assume you already know your way around markets.

The company behind it is iFinex Inc., which also owns Tether, the issuer of the USDT stablecoin. That shared ownership is worth knowing: the two businesses are separate products but sit under one corporate roof, and Bitfinex has historically been one of the primary venues where large amounts of USDT move. When people ask how Bitfinex and Tether relate, the short answer is that they are sister companies, not the same product.

Bitfinex is a custodial exchange, so its safety has the two usual layers: the company holds your keys for you, and your own account can be targeted by phishing. The defining event in its history is the August 2016 breach, in which roughly 119,756 BTC were stolen. Rather than let the affected accounts absorb the whole loss, Bitfinex spread it across all customers — cutting every balance by about 36% — and issued BFX tokens, one per US dollar of loss, as an IOU. Within about eight months every BFX holder had been redeemed at full value or converted into iFinex equity, so customers were ultimately made whole.

The story got a second chapter in February 2022, when the US Department of Justice seized roughly 94,000 BTC of the stolen funds and arrested two people who later pleaded guilty to laundering the proceeds. That recovery does not change the fact that Bitfinex itself absorbed and repaid the original loss years earlier. The record is a genuine positive on recovery, but it does not remove the standing risks of any custodial exchange: it holds your funds, and you must still defend your own account against phishing.