Bloomberg: Bitfinex Incident Shows Small Investors Face Higher Risks

On April 27, Bloomberg issued a statement saying that in a civil lawsuit filed on Thursday, the New York Attorney General accused Bitfinex of concealing a $850 million funding loophole. According to two people familiar with the matter, smaller investors (in Bitfinex's property management) receive less protection, and their funds are often sent to companies around the world by Bitfinex. At the same time, millions of dollars of accounts are more protected, and their funds are sometimes saved through custodian banks in New York. People familiar with the matter said that Bitfinex retail customers were told that their deposits were deposited directly into Poland, Portugal and other regions through Crypto Capital. For multi-million dollar institutional investors, Bitfinex opened an account in Noble Bank, Puerto Rico in 2017, and then opened an account at Deltec Bank in the Bahamas in 2018. In fact, Noble Bank did not hold these funds, and the Bank of New York Mellon once served as a custodian, further enhancing the protection that senior investors receive when dealing with Bitfinex.