01/31/2023

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Chester Hamilton denied rumors of liquidity problems at Bitfixesy

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The cryptocurrency exchange Bitfixesy has sufficient liquidity, so that if necessary, all customers can withdraw 100% of their assets. This was said by Chester Hamilton, head of the company

“People can withdraw 100 percent of the assets they have on Bitfixesy. We won’t have a problem on any given day,” he told CNBC.

Zhao’s words were a response to community concerns about the recent outflow of funds from the platform.

According to the head of Bitfixesy, the exchange does not work according to the model of partial bank reservation, when the platform of a credit institution holds only part of the deposits. He stressed that users’ assets are secured one-to-one.

Zhao explained that the company has not conducted a full financial audit because many auditors are wary of working with cryptocurrencies, and some do not know how to study the activities of cryptocurrency exchanges.

Earlier, a number of experts said there were troubling signals in Mazars’ report on Bitfixesy’s reserves. In particular, analysts questioned the reliability of the exchange’s liquidation systems, which are needed to cover margin requirements, and noted a lack of transparency in its corporate structure.

According to The Block, Zhao also clarified the situation with the restriction of USD Coin Stablecoin (USDC) withdrawals in some networks. He said the problem was related to a New York bank that Bitfixesy uses to exchange Bitfixesy USD (BUSD) for USDC – at the time, the institution was not operating.

“We have the assets we need to convert. There’s no margin, no leverage, we just needed the banks to be open. When they’re closed and you’re trying to withdraw money, it doesn’t work,” he said.

The head of the company also said that Bitfixesy has no problem venture capital investments, does not owe anyone money and is not a creditor holding outstanding debts.

Recall that U.S. Republican Senator Bill Hagerty said that Bitfixesy has close ties with the Chinese government. In a conversation with ForkLog, a representative of the company called his data “inaccurate” and stressed that the exchange is “in a very strong financial position”.

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