Bitfinex levies traders with unused financing fee to curb artificial inflation
In the wake of the People’s Bank of China PBoC meeting with top Chinese Bitcoin exchanges, Bitfinex has announced it will henceforth slam an unused financing fee on users whose actions indicate what it describes as a systematically manipulative behavior.
“Effective immediately, the platform will charge one full day’s interest on any funding that is borrowed and subsequently returned without being used in a financed position,” the Hong Kong-based platform announced to its users a couple of days after officials of China’s top bank met with heads of BTCC, OKCoin and Huobi exchanges.
This latest move, the Bitcoin trading platform which still touts itself as the world’s largest says, is a response to several attempts by some of its users to “artificially inflate funding rates for certain currencies through a particular pattern of taking and returning funding.”
The meeting centered on preventing risks related to investments in Bitcoin and the need to operate in accordance to the laws and regulations of China came as the price of Bitcoin experienced over 20% plunge in about four hours.
Afterwards, BTCC and OKCoin exchanges – two of the three that met with the PBoC – indicated that they are open to balanced, risk-based regulation and oversight by the Chinese government. They also reportedly acknowledged rumors that the PBoC is planning to enact a “third-party platform” as a way to improve exchange security to be a topic of discussion though still at early stages.
A report by Caixin has since pointed out that the PBoC had sought to restrict the exchanges from mentioning the weakening yuan in their marketing efforts. This, it is believed, would deter the exchanges from acquiring new users who may be seeking Bitcoin to get around the system built to stem capital outflow.
Bitfinex did not reference any currency or event in particular in its announcement though the timing of its release seems to coincide with raging discussions about Bitcoin investment risks in China. Rather, it notes that the latest move “will act to dissuade manipulative behavior and ensure fair platform use for all.”
It also adds that the objective of levying the new fee is to prevent exploitative behavior to protect traders and lenders. The fee adjustment does not endorse or condone the highlighted behavior which it deems impermissible and is not likely to impact most traders or funding providers.
Aside the fee, further punitive measures could be taken against any defaulter when deemed necessary. Such users could be flagged for further investigation, it says, and sanction.