Cryptocurrency exchange, Bitfinex today announced that users on its platform will now be able to purchase cryptocurrency directly in the App with bank cards after it has inked a partnership with Canadian payments firm Nuvei.
The collaboration also leverages Nuvei’s infrastructure proprietary fraud and risk management tools through integration with its subsidiary, Simplex.
Announced today, the agreement will give Bitfinex a fiat onramp to conduct and settle crypto transactions, a grey area of business where a gauntlet of KYC requirements and other regulations kick in.
Israeli-based Simplex combines crypto payment processing with fraud prevention technology. It also enables merchants to accept diverse payment methods, including credit card deposits and purchases, with zero exposure to chargeback risk. The service caters to different market participants including exchanges, brokers, wallet and liquidity providers.
Nuvei acquired Simplex earlier this year in a $250 million cash deal.
“Our proprietary platform offers seamless pay-in and payout capabilities, connecting merchants with their customers in 204 markets, with support for more than 500 local and alternative payment methods, plus nearly 210 currencies and 100 crypto assets,” said Nimrod Lehavi, CEO and Co-founder of Simplex.
“Our mission has always been to increase the accessibility of digital tokens and provide an optimal trading experience for our growing customer base,” added Paolo Ardoino, CTO at Bitfinex.
Founded in 2014, Simplex has already signed partnerships with leading crypto exchanges, including Binance and Huobi, among others, to enable users to buy cryptocurrencies with their credit cards. Most recently, it has signed mobile wallet provider Broxus to facilitate buying of bitcoin and ether directly via Telegram.
Although the exact details of the partnership were not disclosed, Simplex often charges 3.5 percent of a transaction, with a $10 minimum purchase amount. The company also applies various restrictions, including a $20,000 maximum for daily transactions when using a credit or debit card, as well as a $50,000 maximum monthly limit.
Earlier this month, the US Commodity Futures Trading Commission (CFTC) settled a nearly two-year investigation into the finances and corporate practices of Tether and Bitfinex.
The stablecoin issuer and its associated crypto exchange agreed to pay a $42 million fine to resolve a closely-watched legal dispute about Tether’s fiat reserves.
The derivatives regulator said the USDT stablecoin was not fully backed at all times by fiat currencies as its issuer had been advertising since its launch in 2014. In fact, Tether conflated its cash holdings with unsecured debts and non-fiat assets. The reported reserves also included funds held by third-parties, as well as the loan it had given to Bitfinex when the exchange needed help responding to a “liquidity crisis.”
For its part, Bitfinex was fined $1.5 million for offering cryptocurrency trading to US investors without having authorization to do so. The CFTC said Tether’s sister platform “executed illegal, off-exchange financed retail commodity transactions with U.S. persons” during a period of two years between 2016 and 2018.