Is Bitfinex Legal in US? Is Bitfinex Safe?
Choosing a trustworthy cryptocurrency exchange is crucial as it directly impacts the safety and security of your digital assets. The high risk of scams in this area necessitates extreme caution from users.
Our analysts have noticed a growing interest in Bitfinex services among users in the US. However, questions remain regarding its safety and legal status within the US. Traders Union experts have addressed this concern by crafting a detailed review that explores both the pros and cons of using Bitfinex.
So, let us tell you if Bitfinex is allowed in the US and if it's safe to use for trading.
Is Bitfinex legal in US? Does it have a license?
Bitfinex is a regulated exchange that provides services in most countries worldwide, except for those under international sanctions, such as North Korea, Iran, Syria, Cuba, and regions like Crimea, Donetsk, and Luhansk. Restrictions may also apply based on requests from local regulators. We compared Bitfinex's level of regulation with the top two global competitors and the top two competitors available in your country. Exchanges with Tier-1 regulation are generally considered the safest. However, Bitfinex's safety level is also influenced by other factors outlined below.
| Bitfinex | Bybit | MEXC | |
|---|---|---|---|
Government-regulated |
Yes |
Yes |
No |
Tier-1 regulation |
No |
Yes |
No |
U.S regulation |
No |
No |
No |
FCA U.K |
No |
No |
No |
AUSTRAC in Australia |
No |
No |
No |
DFSA in UAE |
No |
No |
No |
AMF in France |
No |
No |
No |
Spain |
No |
No |
No |
Germany |
No |
No |
No |
Singapore |
No |
No |
No |
MFSA in Malta |
No |
No |
No |
Seychelles |
No |
Yes |
No |
Other countries |
Kazakhstan, El Salvador |
Austria’s Financial Market Authority (FMA), Georgia, Kazakhstan |
|
Open an account |
|
|
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Other Bitfinex Security Factors to Consider
| Bitfinex | Bybit | MEXC | |
|---|---|---|---|
2FA |
Yes |
Yes |
Yes |
Verification (KYC) |
Yes |
Yes |
Yes |
Successful hacks |
Yes |
Yes |
No |
Cold wallet storage |
Yes |
Yes |
Yes |
Investor protection fund |
No |
Yes |
No |
Open an account |
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|
|
Short summary about the Bitfinex exchange
The Bitfinex crypto exchange is a platform for trading cryptocurrencies and tokens. You can freely trade Bitcoin, Ethereum, Litecoin, cryptocurrency pairs, and fiat pairs like USD, EUR, GBP, JPY, etc. The company has its proprietary trading terminal with a mobile application for margin trading; it has a leverage of up to 1:10 (up to 1:100 for derivatives). The terminal stands out for its several unique features, including scalable orders that a trader can easily customize to suit their trading strategy. Customized orders and strategies can be tested without restrictions on a demo account that does not require a capital investment. You can use bank cards for deposits and withdrawals and there are no limits on the withdrawal of funds. The platform has a typical affiliate program and several investment programs, including staking and deposit.
| 💰 Account currency: | Cryptos, currencies |
| 🚀 Minimum deposit: | $10 |
| ⚖️ Leverage: | Up to 1:10 (margin trading), up to 1:100 (derivatives) |
| 💱 Spread: | Market |
| 🔧 Instruments: | Cryptos, currencies |
| 💹 Margin Call / Stop Out: | No |
Bitfinex Pros and Cons
👍 Bitfinex Pros:
•large trading volumes;
•handy mobile application;
•top-tier level of security;
•custom orders;
•tons of currencies pairs;
•leverage up to 1:10 (derivatives are up to 1:100);
•demo account;
•investment programs.
👎 Bitfinex Cons:
•snail-paced multi-stage verification;
•relatively high fees when working with fiats;
•absence of direct responses from call center, they use only alternative communication methods.
Rules and Regulation
Crypto regulations in the U.S.
Cryptocurrency trading in the United States is regulated by various federal agencies, including the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC). Additionally, certain states may have their own regulatory frameworks governing cryptocurrency activities, adding an extra layer of oversight to ensure compliance with applicable laws.
Crypto investor protection in the U.S.
Regulations enforced by the SEC and CFTC aim to protect investors participating in cryptocurrency trading activities. These regulations focus on enhancing market transparency, preventing fraudulent activities, and ensuring fair trading practices. Moreover, investor education initiatives and disclosure requirements contribute to empowering investors and mitigating risks associated with cryptocurrency investments.
Crypto tax in the U.S.
Profits generated from cryptocurrency trading are subject to taxation in the United States. The Internal Revenue Service (IRS) treats cryptocurrencies as property for tax purposes, meaning that capital gains received from cryptocurrency transactions are taxable. Tax rates on capital gains vary depending on several factors, including the individual's income level and the duration of holding the assets. Additionally, tax reporting requirements ensure compliance with tax laws and facilitate accurate tax calculations for cryptocurrency traders.
Do I recommend using Bitfinex in the US?
The Bitfinex cryptocurrency exchange can be chosen by clients from US, although there are certain nuances. The exchange does not have a financial license, but that is rather because the financial regulator of US does not issue the licenses to crypto exchanges in general. There have been certain security-related incidents, but those very singular cases. The reputation of the exchange can be considered standard.
FAQ
Can I work with crypto exchanges considering that they don’t have a license in US?
The fact that a crypto exchange does not have a license doesn’t mean that traders from US will have problems while working with it. Cryptocurrency exchanges are not subject to licensing in many countries, while there are many exchanges with good reputation. Assess the available information about the exchange and check its reputation.
What security methods for account protection do crypto exchanges employ?
Cryptocurrency exchanges may offer various security methods. These include the two-factor authentication, first and foremost, and also such methods as a security question, additional passwords, etc.
Can an exchange that has had a security-related incident in the past be trusted?
You need to check whether such incidents were regular. If it was one episode several years ago, while the reputation of the exchange is good, you can work with such an exchange.
Should I work with an exchange if I have doubts about its reputation?
No. Always choose the cryptocurrency exchanges that have a good reputation.
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Team that worked on the article
Mikhail Vnuchkov joined Traders Union as an author in 2020. He began his professional career as a journalist-observer at a small online financial publication, where he covered global economic events and discussed their impact on the segment of financial investment, including investor income. With five years of experience in finance, Mikhail joined Traders Union team, where he is in charge of forming the pool of latest news for traders, who trade stocks, cryptocurrencies, Forex instruments and fixed income.
Dr. BJ Johnson is a PhD in English Language and an editor with over 15 years of experience. He earned his degree in English Language in the U.S and the UK. In 2020, Dr. Johnson joined the Traders Union team. Since then, he has created over 100 exclusive articles and edited over 300 articles of other authors.