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Bitfinex Talks about the Future but Not the Hack!

Avatar Gautham 3 years ago

Bitfinex, the exchange which got hacked last month leading to losses of about $72 million has released documents about its post hacking incident future. According to reports, the company has released documents detailing its plans to regain customer confidence and bounce back into the game.

The long document along with company’s current financial standing was shared by some of the cryptocurrency media outlets. The company reiterates that it is still profitable and accounts for various scenarios that may play out in the due course of time. Soon after losing its customers’ bitcoin deposits, the company had put on hold to its operations and started an investigation into the breach. Within weeks, the platform was back up and running with limited functionality. During this period Bitfinex decided to generalize the losses among all its customers at 36.067%.

With generalized losses, even the customers who weren’t affected by the hacking attack bore the burnt. In return, Bitfinex issued an equivalent in Bitfinex tokens to all the contributors, with a promise of compensating them in the near future. Bitfinex has also recently signed a letter of intent with cryptocurrency based crowd-investing platform BnkToTheFuture to raise further investments and to allow eligible BFX token holders to become shareholders in the company. While these recently released documents may be part of the company plans to attract investments in the upcoming fundraising initiative, it fails to satisfactorily explain the status of the investigation into the hacking attacks.

Thousands of Bitfinex customers are still waiting for answers, but the only answer they have got so far is that the company is actively working with concerned law enforcement agencies including FBI. The company’s latest update on the security breach was on August 26, 2016 as a blog post. The FAQs listed in the blog mentions that the company is working with the best blockchain forensics teams and they have made all the arrangements to track stolen coins if any attempts were made to transfer it.

“How was Bitfinex hacked?

We cannot disclose any information at this stage as there are ongoing investigations with third party investigators as well as multiple law enforcement agencies. We will share information as and when it becomes available.”

The platform’s question and response to how it was hacked fail to instill any confidence in its customers or the Bitcoin community. Instead, the response makes it appear like Bitfinex itself doesn’t have a clue about the investigation’s progress.

Thanks to the open source nature of cryptocurrency technology, Bitfinex is now in the process of creating another token called Recovery Right Token. Based on the document, this token is expected to hold a much higher priority than the BFX tokens. The Recovery Right Token can be bought with BFX and any investor subscribing to these after September 30 with BFX tokens may have to get their calculations right before doing so.


BFX tokens were launched at a face value of $1 per token, however, now the token costs less than 50 cents. At the same time, the new Recovery Right Token is being launched at a face value of $1 as well. Those investing in Recovery Right Token on or before September 30, 2016 stand to get 1 RRT per BFX token, after September 30, it will go down to 0.5 RRT per BFX and post-October 15 it will be 0.25 RRT per BFX. The calculation looks more like Bitfinex’s attempt to serially dilute the value of the tokens to reduce their liability.

Ref: Bitfinex blog | Bitcoin Futures Guide | Imgur | Image: Bitfinex

Disclaimer : The statements, views and opinions expressed in this column are solely those of the author and do not necessarily represent those of NewsBTC
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