Bitfinex said to find Caribbean bank after Wells Fargo exit

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Due diligence in the sometimes shadowy universe of digital money often means trying to unscrew the inscrutable.

Bitfinex, one of the largest virtual-currency markets, has been a particular mystery in the crypto world. It was dumped early last year by Wells Fargo & Co. and since then it’s been a secret how the exchange could transfer fiat money, still the lifeblood of global finance, without a bank.

According to three people with knowledge of the matter, Noble Bank International, based in San Juan, Puerto Rico, took over banking duties for Bitfinex last year. As a stopgap between Wells Fargo’s exit and Noble’s entrance, Bitfinex used a string of third-party accounts based in Panama City to stay in the game, according to online documents.

Also affected is Tether, a digital currency traded on cryptoexchanges worldwide that shares a management team with the exchange, including Chief Executive Officer Jan Ludovicus van der Velde. While little public information exists about how Tethers are created, it generally trades for around $1 because each coin is supposed to be backed by $1 of fiat money in a bank. The currency, which started trading in 2015, is described as a stable alternative to Bitcoin’s volatility and can act as a safe haven for crypto investors.

Bloomberg News