Posted on August 8, 2016 by staff

Bitfinex customers suffer ‘generalised’ losses after theft


Bitfinex customers have been told they will lose around 36 per cent of their assets on the platform following the theft of £55 million during a cyber attack.

The Hong Kong-based digital currency exchange said the losses would be “generalised” across the company’s clients and assets.

However customers will be compensated for their losses with ‘BFX’ tokens of credit which can be redeemed by the exchange or for shares in iFinex, the exchange’s parent company.

“This is the closest approximation to what would happen in a liquidation context,” Bitfinex stated.

“Upon logging into the platform, customers will see that they have experienced a generalised loss percentage of 36.067%.

“We are actively discussing various strategic options with numerous potential investors as part of our strategy to fully compensate our customers.

“Such discussions, however, are in early stages and will likely take time to play out.”

It said customers should be able to log on to its platform within 48 hours.

Zane Tackett, director of community and product development for Bitfinex, told Reuters the breach did not “expose any weaknesses in the security of a blockchain”.

It is the second largest such breach of bitcoin currency. In 2014 the Tokyo-based Mt Gox trading exchange was bankrupted when $650m was stolen.

Blockchain is the cutting-edge technology behind bitcoin which many believe will make governance more transparent.

Blockchain analysis company Chainalysis is helping to track the stolen bitcoins.

Earlier this year, Australian entrepreneur Craig Wright claimed he was the creator of bitcoin – but then went back on his promise to provide proof.