Bitcoin Traders Made 700% Returns Before Losing Millions in Hack …

For years, Tian Jia made the kind of returns on his money that investors in the rest of the world could only dream of.

The 29-year-old Beijing-based programmer had $440,000 on deposit at the Hong Kong bitcoin exchange Bitfinex until last week and, on good days, would wake up to find a couple thousand more dollars in his account than when he went to sleep. The earnings came from lending his dollars to traders who wanted to leverage their bets. The exchange allowed lenders like Tian to set their own rates, and he says margin traders paid as much as 700 percent annualized interest to borrow dollars. At times, he earned as much in one day as holders of U.S. Treasuries earn in a decade.

“The returns were really great,” Tian said. “Bitfinex was quite innovative and among the first to come out with products including margin lending.”

That lucrative practice came to a stunning halt last week after Bitfinex said it was hacked for 119,756 bitcoins, worth about $70 million at current prices. While his U.S. dollars were not stolen, Tian is being forced to forfeit 36 percent of his deposit—about $160,000—as part of a rescue plan the exchange is imposing on all its

Read more ... source: TheBitcoinNews