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Broken BitBank Bitfinex shaves 36% from all accounts
In the 'sharing economy' you pay when sites get hacked
Hong Kong cryptocurrency exchange Bitfinex, which last week closed itself down after being hacked, has now told account-holders they'll all have to pay for the mess by surrendering some of their account balance.
In a new update for users the outfit says that “After much thought, analysis, and consultation, we have arrived at the conclusion that losses must be generalized across all accounts and assets.”
The company says “This is the closest approximation to what would happen in a liquidation context” and that when customers next log in to the site, they “... will see that they have experienced a generalized loss percentage of 36.067%.”
At least users' full balances are being noted, with a “token labeled BFX to record each customer’s discrete losses.” The company's also “actively discussing various strategic options with numerous potential investors as part of our strategy to fully compensate our customers,” but warns those talks “are in early stages and will likely take time to play out.”
It appears that some financial gymnastics are on the operators' minds, as the post says the tokens “will remain outstanding until redeemed in full by Bitfinex or possibly exchanged—upon the creditor’s request and Bitfinex’s acceptance—for shares of iFinex Inc.”
Shares in a discredited company in exchange for crytpocurrency? Call my broker – those guys who went long on Enron.
Bitfinex members are divided on the move, with some arguing that this is the best deal they're likely to get in the uncertain and unregulated cryptocurrency market. Others want Bitfinex's operators' heads on on a pike. ®