Re: Bitfinex legal obligations to users

So Im hearing that all US users at Bitfinex account are now frozen.
Any United States users that can confirm this?

It's unclear how many users are affected. Apparently only verified US users are affected. One of two stories is being told:

1) Synapse Pay revoked Bitfinex's access to their bank accounts and wired money held back to customers. Those users had their accounts frozen for "accounting reasons" and it's unclear how many have access to the rest of their funds now.

2) Some users had their "BitGo wallets frozen" (according to BitGo, this was actually done by Bitfinex) and for similar "accounting reasons" do not have access.

Really scary stuff for these customers.

There are a lot of restrictions on issue of "securities" in the US.
That could be one reason with Bitfinex does not want US citizens to buy these tokens.

Here's the problem: They issued the tokens to US users. These tokens are either a bond or a security -- or something in between. In any case, issuing them to US users is likely a violation of US securities law and could get Bitfinex into hot water with the SEC.

They can't really argue that they aren't allowing US users to trade them either, since they are allowed to sell them on the exchange. Unverified US users can also use all trading functionality (including margin trading and trading of the BFX token).

They are trying to avoid prosecution by the SEC with a rule that U.S. people can only sell BFX tokens, but they cannot buy BFX tokens. Bitfinex will argue that they aren't allowing US people to trade them because they can't buy and sell them. I don't think that strategy will work, the SEC will probably prosecute them anyway.