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So everyone loses 36% of their account value?
by jboggan 10y ago
So everyone loses 36% of their account value?
- 467568985476 10y agoSeems like it... this can't possibly be legal, right? Surely the company should be forced to liquidate to make customers whole again, or issue debt/equity to get the money. I'd love to read a take on this from someone with a better understanding of the regulatory environment Bitfinex is subject to.
- imaginenore 10y agoBut it might be in the interest of the customers. If Bitfinex can keep functioning (a big "if"), they will eventually make that $80M that got stolen. Bitcoin exchanges generally are quite profitable enterprises, so I would say it's theoretically possible.
- tedunangst 10y agoIn a way, it sounds like they are issuing debt, the BFX token. The people "buying" the debt just don't have much say in the matter.
- Animats 10y agoFrom a CFTC action: "BFXNA Inc. d/b/a Bitfinex is a corporation formed and existing under the laws of the British Virgin Islands, and has its principal place of business at suite 13/F, 1308 Bank of America Tower, 12 Harcourt Road, Central, Hong Kong, China."
- bdcravens 10y agoIf a bank tried to pull this ...
- daveguy 10y agoBanks couldn't pull this. They're regulated and insured. Investment banks less so, but plain old banks holding your checking and savings -- not a chance.
- imaginenore 10y agoBank accounts are only insured up to a certain amount. FDIC limit is $250K.
- bdcravens 10y agoMost people know this, and setup their finances appropriately. Many people who have a Bitcoin position seem to be ignorant to the fact that they aren't insured for even $250. (I've owned Bitcoin since 2011) I suppose they've taken for granted that for pretty much their entire life they've banked and never really thought about the possibility that tomorrow it'll all be gone and it's just SFYL.
- csomar 10y agoIt has been said many times: Not your keys, not your bitcoins. You don't own bitcoin if you put them on an exchange. Period.
- aianus 10y agoThe 36% haircut represents ~1.5 years of USD margin funding profits on Bitfinex. I was well aware of the risks I was taking to earn that kind of return :)
- deleted 10y ago[deleted]
- elevensies 10y agoCyprus did it not that long ago. They forced a loss on bank customers, although in a way that targeted non-citizens.
- icebraining 10y agoYes, but Cyprus is a sovereign nation, not a private bank.
- atemerev 10y agoAnd so what, it is anointed with papal infallibility and divine right of kings?
- daveguy 10y agoAnd not just 36% of their bitcoins. Apparently everyone is losing 36% of everything, ETH, LTC, USD, BTC. That would mean the Bitcoin loss would have to be 36% of assets, not 36% of bitcoin. I wonder if anyone realized bitfinex considered your other deposits as their own personal insurance against theft of bitcoin.
- Kadin 10y agoIt's sort of like being a Lloyds of London "name" ... only without any of the benefits.
- charlesism 10y agoSo if John Doe transferred $100,000 to his Bitfinex account but never pulled the trigger and bought Bitcoin with it, he's going to log in and find $64,000? Ouch! So much responsibility, and very little improvement since Gox. I still can't figure out how Bitfinex left such a large % of their assets in one place.