Post
Topic
Board Service Discussion
Re: Caution advised when using Bitfinex - High default probability
by
zorke
on 13/09/2014, 06:30:24 UTC
Current interest rates are the proof that your theory is completely wrong. Unless dropping bitcoin prices drastically decrease default risk, which is absurd, because the reverse is true (margin call cascade risk). 
Dropping bitcoin prices will actually increase the default risk, not decrease it. The vast majority of positions are long leveraged positions on bitfinex.

I am pretty sure that they have the appropriate risk controls installed to prevent potential defaults on accounts as positions will be liquidated prior to going into negative equity.