British Virgin Islands-based cryptocurrency exchange Bitfinex has announced that the fee for deposits of less than $1,000 has been eliminated. The announcement came in a press release that was circulated to Finance Magnates.
Paolo Ardoino, the exchange’s chief technical officer, explained that the elimination of the fees could make the platform more accessible for smaller retail traders: “removing the small deposit fee opens up the Bitfinex platform to a wider group of new retail traders who are seeking to enter crypto trading but with a smaller amount of upfront capital,” he said.
We have removed the small deposit fee!
Bitfinex’s users can now enjoy fee-free crypto deposits also for amounts less than 1,000 USD equivalent.
Discover more about the journey of the small deposit fee and the reasons why we decided to remove it: https://t.co/6HB4FcMziC pic.twitter.com/EMjATqEIVh
— Bitfinex (@bitfinex) December 18, 2019
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The fee was originally put in place in 2017 to prevent spam, but the exchange has developed a new set of “capabilities to thwart deposit-related spam attacks”
The exchange says that the small-deposit fee was originally instituted at the end of 2017 “to counter the high number of small deposits made in an attempt to spam our platform and slow down [Bitfinex’s] services.” In other words, the fees were put in place in order to keep malevolent users from jamming up the exchange with numerous, minuscule deposits.
According to the announcement, a high number of small deposits “created an excess of tiny wallet inputs that required wallet input consolidation maintenance.” The fee reportedly “served to keep withdrawals flowing smoothly for all our customers.”
However, Ardoino explained that Bitfinex had taken other measures to prevent spam deposits on the exchange: “As we have developed capabilities to deter and thwart deposit-related spam attacks, the small deposit fee is no longer required,” he said.
Bitfinex began a partnership with Chainalysis to build out compliance earlier this month
The announcement came less than a week after Bitfinex began a partnership with Chainalysis, a New York-based provider of compliance software for real-time monitoring of cryptocurrency transactions.
At the time, Peter Warrack, Chief Compliance Officer at Bitfinex, said that “the solution does not share information identifying users, which is kept strictly in-house.”