Hacked bitcoin firm plans to spread losses across all users

Bitfinex’s “socialized loss scenario” most likely means it will distribute its losses among all of the platform’s users, according to Charles Hayter, chief executive and founder of digital currency comparison website CryptoCompare. This would mean users whose bitcoins were never originally stolen would be affected.

“In essence, (this is) a haircut for all users on their deposits. To what degree depends on the devil in the details and what the total capital held by BitFinex is,” Hayter told CNBC via email.

According to Hayter, the theft represents about 0.75 percent of all bitcoins in circulation and between 10 and 30 percent of BitFinex’s capital holdings.

“Some users who were not hacked will feel angry at having to stump up their funds to cover shortfalls elsewhere on the exchange. Whether it’s the right decision or not – time will tell,” he added. “Other exchanges have funded the losses off their own book – but then the losses weren’t so extreme.”

The crypto-currency traded around $570 per bitcoin on Friday, which is a drop of about 12 percent compared to the end of last week. However, longer-term bitcoin holders are doing well: over one year, its

Read more ... source: TheBitcoinNews