While Black Friday is usually known for its price reductions, the minimum fee for a wire withdrawal on Bitfinex just went up from $20 to $60. While this seems to be specifically designed to combat Bitfinex’s recent withdrawal problems, it effectively makes Bitfinex one of the most expensive exchanges to withdraw fiat currency from in the process.
Bitfinex, the fifth largest exchange by adjusted volume according to CoinMarketCap, did not announce the change even though it did issue token related announcements yesterday and today. The change became apparent by comparing the currently available fees schedule on Bitfinex with the one cached by Google:
Asked for comment, Kasper Rasmussen, head of marketing at Bitfinex, wrote in an email: “Our fee schedule remains subject to change at any time and for a wide array of reasons. This could reflect added complexities associated with a given token, transaction or process, or supply/demand factors.”
Increasing the minimum fee, therefore, seems to relate to the recent difficulties Bitfinex and its payment processor, Crypto Capital, have had with processing both U.S. dollar and euro withdrawals. In the last two months, Bitfinex customers reportedly experienced long delays before receiving withdrawals, some more than a month. In some cases, wire withdrawals were canceled and refunded to the customers’ accounts at Bitfinex.
It’s not the first change Bitfinex has made to their wire-fee schedule in recent weeks. Two weeks ago, Bitfinex added a 3% fee on wire withdrawals that exceed more than $1 million in aggregated value or that accounted for more than two withdrawals during a period of 30 days. Although that fee was also effective immediately, Bitfinex did issue an announcement on that change.
Wire less, take more
Both changes seem to be introduced to discourage customers from initiating multiple, small-denomination wires. Rather, by increasing the minimum withdrawal fee and adding fees to high-frequency withdrawals, Bitfinex seems to encourage its customers to withdraw funds in a single wire once a month. Cryptocurrency exchanges generally place a heavy burden on banks, with high volumes of deposits and withdrawals that compliance personnel must analyze for money laundering and terrorism finance concerns. Reducing the number of wires therefore relieves some of the pressure on Crypto Capital and their banks to process all wire transfers.
However, the new increase on minimum-withdrawal fees is likely to hurt the retail customer who does not have six-figure sums available to trade or bundle withdrawals into a single wire. Effectively, the change comes down to a hefty 0.6% fee for the minimum withdrawal size of $10,000 . Alternatively, to reach the 0.1% fee now requires a minimum withdrawal of $60,000. That’s quite a threshold for the average retail customer.
In comparison, Coinbase Pro has a wire withdrawal fee of $25. At Bitstamp, the minimum fee for an outgoing wire is $15, while Kraken’s fee is even lower at only $5. In addition, Coinbase Pro and Kraken both offer the option of SEPA withdrawals for as little as 0.15 and 0.09 Euros respectively. Effective immediately, withdrawing U.S. dollars and euros from Bitfinex just got more than twice as expensive as withdrawing fiat from these competitors.
Robert-Jan den Haan is interested in understanding complex puzzles. He applies that interest in research and investigations, both as a freelance journalist and as a Ph.D. candidate at the University of Twente in the Netherlands.
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Bitfinex quietly increases minimum wire fee written by Robert-Jan den Haan @ https://www.theblockcrypto.com/2018/11/23/bitfinex-quietly-increases-minimum-wire-fee/ November 23, 2018 Robert-Jan den Haan