Bitfinex

Is Bitfinex safe?

Bitfinex is the exchange where customers learned what socialised losses mean. When hackers stole almost 120,000 bitcoin in August 2016, Bitfinex did not absorb the loss. It cut every account balance by 36%, whether or not that account had been hit. Customers were repaid in dollars within eight months, but the episode is a clear example of how exchange risk is your risk.

Ten years on, Bitfinex still publishes no audited accounts and no proof of reservesProof of reservesA report in which a crypto exchange shows that it holds enough coins to cover all customer balances, ideally checked by an outside firm.More in the glossary that counts its liabilities, and it is licensed mainly in El Salvador. We score it 37/100, below HTX and well below most large offshore exchanges.

The 2016 hack, step by step

On 2 August 2016 attackers stole 119,754 BTC, about $71 million at the time, from Bitfinex customer wallets that used a multi-signatureMultisigA crypto wallet that needs approval from several keys to move funds, for example any 2 of 3, rather than from a single key.More in the glossary setup with the custody firm BitGo. Bitfinex halted trading and, a few days later, applied a 36.067% "generalised loss" to all balances.

In return, customers received BFX tokens, IOUs worth $1 each for every dollar lost. Bitfinex bought them back over the following months and said in April 2017 that all BFX tokens had been redeemed. Some customers swapped BFX for shares in iFinex, Bitfinex's parent, and later received Recovery Right Tokens (RRT) entitling them to a share of any recovered funds.

Most of the stolen bitcoin was found in 2022, when the US Justice Department seized about 94,000 BTC and arrested Ilya Lichtenstein and Heather Morgan. Both pleaded guilty to money-laundering conspiracy, and Lichtenstein was sentenced to five years in November 2024. In January 2025 prosecutors asked the court to return the 94,643 recovered BTC to Bitfinex, but the judge questioned whether that was proper, and other claimants filed competing petitions. In October 2026 the court was still dealing with those petitions. If the coins do come back, the windfall mostly goes to Bitfinex and its token holders, not to the customers whose balances were cut in 2016.

Reserves: very little to check

Bitfinex shares owners and managers with Tether, the issuer of the USDT stablecoin. Neither company has published full audited financial statements.

The New York attorney general's 2019–2021 investigation found that in 2018 Bitfinex lost access to about $850 million held by Crypto Capital, a Panama-based payment processor, and covered the gap with money from Tether's reserves without telling customers. Bitfinex and Tether paid $18.5 million in February 2021 and agreed to stop serving New York, without admitting wrongdoing. A separate CFTC order in October 2021 fined Bitfinex $1.5 million over illegal off-exchange retail commodity transactions.

Bitfinex has not published a proof of reservesProof of reservesA report in which a crypto exchange shows that it holds enough coins to cover all customer balances, ideally checked by an outside firm.More in the glossary that includes customer liabilities and is checked by an outside firm, so we score its reserves at 25.

Where it is licensed

In May 2026 Bitfinex received a digital asset service provider licence from El Salvador's National Commission of Digital Assets, adding spot trading to its earlier Salvadoran licences for derivatives (January 2025) and tokenised securities (April 2023). It has no licence in the US, the UK, or the EU under MiCAMiCAThe EU's Markets in Crypto-Assets Regulation, which requires crypto exchanges and other providers to be licensed and supervised.More in the glossary. El Salvador's regime is new and much less demanding than New York's or the EU's, so we score licensing at 25.

Who should be careful

• Anyone keeping long-term savings on Bitfinex. The 2016 haircut shows that if the exchange loses money, all customers can share the loss.
• Margin lenders. Bitfinex's peer-to-peer funding market pays interest, but your coins are lent to leveraged traders and you rely on the exchange's liquidation system to get them back.
• Anyone in a restricted country using a VPN, who would have no legal protection if an account is frozen.

Bitfinex does have strengths. It has run for more than a decade without failing, offers deep liquidity in bitcoin and USDT, and the people who stole and laundered its bitcoin were convicted. None of that changes the structural risk for customers.

How to use it more safely

1. Use a hardware security key or authenticator app for login and withdrawals, and turn on withdrawal address whitelisting.
2. Keep only what you are actively trading on the platform.
3. If you hold USDT, understand that Bitfinex and Tether are closely linked companies, so problems at one could affect the other.

How we scored it

Security history (55) is Bitfinex's best factor, because customers were repaid in dollars after 2016. Reserves and licensing (both 25) are the weakest, with no audited accounts and only an El Salvador licence. Compare KuCoin and Bitget, which covered their hacks from their own funds.