Embattled cryptocurrency exchange Bitfinex has launched a new social network aimed at helping its traders exchange ideas and share their insights.
Known as Bitfinex Pulse, the company’s April 27 announcement said the goal is to recreate the buzz and discourse of markets that dates back to the New York Stock Exchange’s iconic trading pits filled with men in colored jackets.
Paolo Ardoino, Bitfinex’s chief technology officer, said Pulse was launched in response to demand from users for a professional content distribution platform.
Users will have the chance to write, share, and like “pulses” from fellow traders, and content can also be distributed onto other networks such as Facebook and Twitter.
“Bitfinex Pulse will become a valuable information source, while also being a fun and intuitive way for traders to interact with each other,” Ardoino said. “Bitfinex Pulse will foster the friendship and community spirit that makes Bitfinex a unique place to trade.”
Client-centric approach
Ardoino told Modern Consensus via email that the launch of Bitfinex Pulse follows a significant increase in active user engagement, which he said is up 20% so far this year.
“BFX Pulse provides a chance to bring those users together to exchange ideas, interact with each other, and take part in the industry’s most interesting conversations,” he explained.
Ardoino acknowledged that the concept of a social network for traders is not new—competitor eToro describes itself as a social trading platform, with plenty of tools allowing more inexperienced users to emulate the market moves and strategies of investors with a track record of strong returns.
But, Ardoino added, Bitfinex’s goal is to stand out by being a destination for premium content. “Bitfinex Pulse will have an emphasis on niche, real-time, and high-quality information sources tailored towards our active community of traders,” he said.
Bitfinex is not the only exchange looking at adding content and building a community. Early this year, Kraken hired crypto news outlet Coindesk’s highly regarded founding editor, Pete Rizzo, to develop content that will attract and engage users. That said, Kraken’s as-yet-unspecified content will be broader than Bitfinex Pulse’s client-centric approach. Rizzo’s brief is to interest people in cryptocurrency in general, as well as attracting them to it’s platform.
Quality control?
But with Ponzi schemes continuing to infiltrate the crypto sector, along with scam ads promising outsized returns, how is Bitfinex planning to monitor the quality of the posts on Pulse? Are moderators going to be prowling for content that breaches community guidelines?
Well, no.
“Currently, issues of fake or unsavory posts will need to be reported and then the customer service team will review, and remove if necessary,” Ardoino explained. “Users can only post on BFX Pulse if they have a verified account so this will provide a layer of protection, as Bitfinex will have that user’s information.”
Legal woes
However, questions have been raised about the quality of Bitfinex’s “know your customer” (KYC) policies.
Most notably, New York Attorney General Letitia James’ ongoing lawsuit accusing Bitfinex and its sister company, stablecoin-issuer Tether, of fraud and state securities law violations is hinged on the exchange having New York-based clients despite it formally banning New Yorkers (and then all U.S. citizens) years ago. That suit accuses Bitfinex of hiding a loan from Tether to cover the exchange’s $850 million loss to an alleged conman and an allegedly crooked payment processor.
That’s not Bitfinex’s only legal trouble. Recently, a number of class action lawsuits accusing iFinex—which owns Bitfinex and Tether—of market manipulations responsible for the entire crypto winter of 2018. It is seeking damages of an eye-watering $1.4 trillion.
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