Bitfinex Updates Its Users on the Progress of the Investigation

Bitfinex, the Hong Kong-based cryptocurrency platform is finally ready to share more information about the recent security breach. The digital currency platform has made preliminary findings of the investigation public in its recent update.

On August 2, 2016, Bitfinex detected a security breach that resulted in the theft of 119,756 bitcoin worth over $72 million as per the bitcoin price on that day.  The theft has been under investigation since then with Ledger Labs in the lead. According to the report, the platform hired the services of Ledger Labs within hours of discovering the attack. In addition to an investigation of the security breach, Ledger is also carrying out an audit of Bitfinex’ balance sheets for both cryptocurrency and fiat assets and liabilities.

Ledger Labs has so far been unsuccessful in identifying the attack vector. However, the blockchain forensics and technology firm has identified few areas in the exchange software architecture that need improvement. The preliminary report has also identified a key security issue that allowed BitGo to release large amounts of funds without raising any alerts or notifications.

Bitfinex has stopped using the segregated multi-signature wallet solution offered by BitGo. Instead, it has reintroduced the previously used multi-signature cold wallet procedure while it reassesses the storage options.

Since the breach, Bitfinex has been hit with various allegations, ranging from the involvement of platform’s top management in the incident to their lack of contribution towards compensation. In the latest update, Bitfinex reiterates its commitment towards the customers. It further states,

“Management has committed all reserves of the business with a view to making our customers whole. Moreover, any principals and employees of the business with any property on Bitfinex were subject to the loss allocation”

Shortly before resuming its service, Bitfinex announced that it will be regularizing the losses among all its users. The platform has deducted a bit over 36 percent of all the users’ account balance and substituted it with BFX tokens. These BFX tokens are to be either redeemed for funds or shares in the company on a later date.

“We are actively engaged with efforts to convert certain qualifying token-holders to shareholders of Bitfinex and to redeeming the remaining BFX tokens through a combination of new capital and earnings.”

While there is no concrete timeline fixed for the settlement of losses, the company continues to work on its compensation arrangements. The latest update is a good sign, except for the lack of information about the hack itself.  The Bitcoin community may have to wait a bit longer to get all the answers they have been looking for.

Ref: Bitfinex | Image: NewsBTC