The last month’s security breach at BitFinex had lost traders more than $60 million worth of Bitcoin. It sparked confusion and anger in a community which had already posed victim to many such hacking incidents in the past.
Gavin Smith, the CEO of Bitcoin margin trading firm First Global Credit, touched on such incidents in his speech at the recent Capital Markets Blockchain Conference in London. But instead of repeating what has been printed a thousand times on the internet, Smith preferred to discuss the immediate decisions others and his company in particular took in response to the BitFinex hack.
“We took any collateral that was not required to fund existing position hedges and immediately pulled these back to our cold storage wallets,” he stated. “While there was no immediate suggestion of contagion risk, we felt it was better to take action first and then watch how the situation developed.”
With time, the fundamentals surrounding Bitcoin market improved. Smith meanwhile noted a substantial change in the spread between USD and BTC deposit rates. Before BitFinex hack, the available return on USD rates to finance margin position was between 15 and 20%, and Bitcoin deposits were down at 1.5 to 2%. Smith said: