Bitfinex, the fifth largest cryptocurrency exchange in the world by volume, is moving its base to Switzerland. The British Virgin Island-based company will now be relocated to Zug- an area populated by some of the biggest names in cryptocurrency and blockchain industry. ShapeShift, and Ethereum are two of the most prominent names based here.
A new domicile for the company
Bitfinex CEO, Jean Louis van der Velde confirmed the shift while talking to the Handelszeitung earlier this week. He said, “We are looking for a new domicile for Bitfinex and the parent company iFinex, where we want to merge the operations previously spread over several locations.”
The leadership at the exchange has been meeting the head of Economic Department of Switzerland Johann Schneider-Ammann and members of the State Secretariat for International Finance SIF to discuss the move.
Currently, Bitfinex works under its parent company iFinex. After the move, the exchange will be incorporated as a separate public limited company. The entire management team of the exchange will be shifting to Zug as well. The technical, financial and legal departments of the exchange will be operational from Switzerland after the move.
It is important to note that the company hasn’t finalized its plan for the move yet. London is another top contender for the new location. However, van der Velder says that Switzerland is “on top of the list of jurisdictions” that they are considering. He said, “We want to be the most transparent of all exchanges and meet the requirements of the Swiss regulator.”
Could a move help Bitfinex in troubled times?
Schneider-Ammann called for a crypto-nation identity Switzerland. Zug, the place where Bitfinex plans to relocate to is already the home to the entire Ethereum management and foundation. Apart from this, popular companies like Etherisc, Monetas, Xapo, and ShapeShift are also based in this location.
Bitfinex has already landed in hot water with its recent scandalous relationship with Tether, a company that CEO van der Velder is partially involved in. Tether, which claims to offer a blockchain alternative to the USD was slapped with a subpoena by the CFTC earlier.
The exchange has already shut down its US operations and Tether broke away from Friedman LLP, its longtime auditory. A hack amounting to over 70 million dollars further tarnished the reputation of the exchange. Dutchman van der Velder has partnered with Holland-based ING Group for banking purposes after several banks in the US and Taiwan denied their proposals for partnership. However, the company hasn’t clearly stated the fate of this banking relationship when it moves to Switzerland.
The Swiss Financial Market Authority (FINMA) is yet to approve the proposal. The first-ever license by the authority was granted to Payment21, a cryptocurrency exchange, in October 2017. FINMA suggested last month that ICOs have to follow securities and anti-money laundering laws of the nation. Given that Bitfinex is known for an opaque working environment, working at several locations around the world and not revealing details about its partnerships and plans, convincing FINMA could be a challenge.