Bitfinex customers offered equity in compensation for bitcoin lost in hacking

Bitfinex customers offered equity in compensation for bitcoin lost in hacking

Customers of bitcoin exchange Bitfinex are being offered equity in the company in compensation for the losses imposed on them following the hacking of the exchange in early August.

Under the deal, customers who were issued BFX tokens following the decision by the company to socialize the losses caused by the hack will be able to use those tokens for equity in iFinex, Inc., the British Virgin Islands-based parent company of Bitfinex.

The management of the equity issue is being handled by bitcoin equity crowdfunding service BnkToTheFuture (Bnk To The Future Ltd.) who will be facilitating the exchange of tokens via a Special Purpose Vehicle (SPV).

“When clients’ funds are stolen from an exchange that is the size of BitFinex, we need to (where possible) focus on finding good market solutions that can potentially compensate investors faster than traditional proceedings,” BnkToTheFuture Co-Founder and Chief Executive Officer Simon Dixon said in a statement. “Today we may be able to use new Blockchain assets and financial innovation to produce better and faster solutions for victims.”

Trying

The decision by Bitfinex to socialize its losses across all of its customers remains highly controversial and arguably questionable under law, but to the exchange’s credit they are at least trying to do the right thing by customers post hack and giving them equity in the company goes at least some way in compensating those who have lost bitcoin.

What Bitfinex’s parent company iFinex, Inc. is worth however is another matter; customer losses in the hack came in at 119,756 bitcoin which at the time the hack took place was valued at $65.6 million or at today’s BTC/USD price is $69.3 million, a sizeable sum for any company.

The deal is a great one for the rapidly growing BnkToTheFuture who now claims to have hosted funding rounds resulting in over $70m worth of investments from qualified investors over the past year, up from $10 million in June 2015.

Details as to how the exchange of BFX tokens to equity will occur are still being sorted out with both companies saying only that full details will “be released at a future time.”

Image credit: zcopley/Flickr/CC by 2.0
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Duncan Riley

Duncan Riley

Duncan Riley is a senior writer at SiliconANGLE covering Startups, Bitcoin, and the Internet of Things.

Duncan is a co-founder of VC funded media company B5Media and founder of news site The Inquisitr, and was a senior writer at TechCrunch in its earlier days.

Tips? Press releases? Intersting startup? email: duncan@nichenet.com.au or contact Duncan on Twitter @duncanriley

Duncan Riley

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