Bitcoin sinks after exchange reports hack
The Hong Kong-based exchange said on August 2 that hackers had stolenbitcoins from some clients' accounts, the second-biggest such hack in dollar terms, and later said it would spread the losses across all its customers, whether or not they had been hacked or even held bitcoin.
It said customers would forfeit 36 percent of their holdings and be given "BFX tokens" instead that could be redeemed by the exchange or converted to shares in its parent company iFinex. Both elements of the plan are open to legal challenge, lawyers said.
The terms state "bitcoins in your multi-signature wallets belong to and are owned by you", which Straus said implied a special banking relationship with clients that the Bitfinex plan would breach. The exchange's tokens could also be problematic, said Zach Zweihorn, a lawyer at DavisPolk who specialises in U. The way they are currently being described - redeemable by the exchange or convertible to shares in iFinex - places them somewhere between a bond and a security and bitcoin sinks after exchange reports hack it highly likely that issuing them and trading them would require licences in the U.
The U. Securities and Exchange Commission did not return a request for comment.
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Bitfinex did not respond to requests for comment on either issue. He said he took a 36 percent "haircut" across all assets, including U. Nowhere in their terms of service did it mention that this was a possibility," said the user, who works in the financial services industry.
Bitfinex is nevertheless hoping that traders will be patient and accept that they won't get a better deal if legal challenges force it into liquidation. Traders will be aware of the fate of Tokyo-based crypto-currency exchange Mt Gox, which suffered the biggest bitcoin theft of all time inand consequently went bankrupt.
Traders have not recovered any losses, and court proceedings are still ongoing. He said he thought people would agree to the deal if there was a chance of getting some of their money back.
You might still end up with less money," said Murck, who is also co-founder of the Bitcoin Foundation and its former general counsel, but the "odds are fairly low" that nobody will test it in court.