Why Is Bitflyer Witholding Funds?

There are many complaints involving the fact that Bitflyer is not allowing customers to withdraw fiat and/or cryptocurrency, claiming that for bureaucracy-related reasons, their accounts need to be reviewed once again.

Unfortunately, this “review” process ends up lasting months, with no end in sight. The end result is that blameless victims who have already undergone an extensive account approval process (which culminated with receiving a document from Bitflyer via FedEx) are essentially unable to access their funds.

A possible explanation could revolve around the fact that Bitflyer is facing liquidity issues and therefore using bureaucratic excuses to stall. A relatively recent example is represented by the hack of another exchange, Bitfiniex, which caused serious financial problems at that point and resulted in a financially debilitating situation for customers. Or, of course, perhaps the most (in)famous precedent is that set by the now-defunct MtGOX exchange.

When it comes to MtGOX, customers made the mistake of ignoring obvious warning signals for an extended period of time. Warning signals such as a deterioration of the MtGOX banking relationships, which resulted in fiat gateway-specific problems. Later on, as the problems became worse, bitcoin ended up trading at a premium at MtGOX compared to other exchanges. This state of affairs, instead of setting off red flags, made many decide to keep using MtGOX, despite their more than legitimate concerns. In the end, MtGOX collapsed and customers were forced to wait for several years until some kind of a resolution was reached.

In light of the many precedents one can easily find in the cryptocurrency industry, it makes perfect sense to be more than suspicious whenever a company such as Bitflyer appears to be engaging in illegitimate stalling tactics. Taking action sooner rather than later would be the proper approach and, of course, those who are currently looking for an exchange should exercise extreme caution and preferably stay away from companies such as Bitflyer, with a track record that is questionable at best.