The recent Bitfinex hack has caused a lot of confusion among cryptocurrency enthusiasts, and will continue to do for the time being. However, it also became apparent the company will penalize all of its users to recover the losses somehow. Moreover, the exchange will issue its own coin which acts as an IOU.
When Bitfinex got hacked, the Bitcoin community was greeted with yet another shock. As a result, the price per Bitcoin started to drop spectacularly albeit things seem to have stabilized ever since. More worrisome, there is still no trace of the stolen coins so far, which raises even more questions than answers right now.
But Bitfinex also has another issue to deal with, as they are responsible for this US$65m heist. Since the company does not have enough liquidity to cover the losses themselves, and BitGo is not at fault for whatever happened, an alternative plan had to be created.
Introducing BFXCoin To Settle The IOUs
That plan seems to have come to fruition, albeit it remains to be seen whether or not the company will effectively go ahead with this idea. Right now, there is a blog post that will see the creation of BFXCoin, which will act as a “debt currency” on the exchange platform. Do not be mistaken in thinking users will be able to trade this currency, though.
The bigger question is what this BFXCoin will do for its holders. On paper, every user will receive an amount of BFXCoin which can be bought up by Bitfinex when they repay outstanding balances. Alternatively, users can request to redeem these tokens in exchange for shares in the overarching company, called IFinex. However, doing so will require approval from the parent company and the creditor.
While some people may feel this is a proper solution, do keep in mind all Bitfinex users will have their balances reduced by 36% of total assets. More importantly, this will not only affect Bitcoin balances, but also every supported altcoin and fiat currency users may have on their balance at the time of the hack.
In the end, the announcement of BFXCoin will not do much for users. This is nothing more than a digital IOU, with a promise by Bitfinex to repay customers. However, they will also avoid legal trouble by taking this action, while it does not create a legal obligation for the exchange to repay its users.
Source: Bitfinex Blog
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