How BFX Coin might be a way for Big Blockers to Gain an (albeit indirect) voice in Blockstream
Zane Tackett, Director of Community & Product Development for Bitfinex Limited, recently gave a Q&A style interview on the Whale Club Team Speak.
The interview has made the rounds on reddit and elsewhere and it did not contain too many astounding revelations. But, many people missed one of the most useful nuggets of information he gave at about 20:09 of the following recording when he stated that:
Bitfinex has investments in Blockstream, Shapeshift, Netki, and Tether.
https://soundcloud.com/user-173875295/bitfinex-itself-will-not-be-taking-a-haircut#t=20:09
As has been stated in the most recent Bitfinex press releases, user accounts are being credited with "BFX" tokens in the amount of the 36.067% haircut on the basis of 1 BFX = $1 USD. The press releases have stated that Bitfinex will alllow trading of the BFX tokens (except it will possibly be restricted for U.S. residents) and that the BFX tokens "will remain outstanding until redeemed in full by Bitfinex or possibly exchanged—upon the creditor’s request and Bitfinex’s acceptance—for shares of iFinex Inc."
So, here are the questions that jump out at this point:
Given that Bitfinex probably encompasses many related entities that do and own different things, what does "iFinex Inc." actually own?
Will Bitfinex create some kind of timeline or set of conditions defining when they would allow conversion of BFX tokens into iFinex Inc. shares or will they just perpetually withold acceptance of conversion until they can (if they can ever) repay the lost money?
Is iFinex Inc. the entity that holds the investments in Blockstream, Shapeshift, Netki, and Tether?
How big are the investments in those entities?
If iFinex Inc. does hold those investments, will Bitfinex alienate the investments in those entities from iFinex Inc. prior to allowing conversion of BFX tokens into iFinex Inc. shares?
If Bitfinex does allow conversion of BFX tokens to equity in iFinex Inc., will they restrict U.S. residents from such conversion for (rightfully founded fears) that the SEC will deem this a securities offering to non-accredited investors (of which there are surely way too many among the BFX token holders)?
Let's say iFinex Inc. does hold the investments in those entities and some BFX Token holders (maybe even some large ones) are able to convert to iFinex Inc. shares. Could this open the door for bitcoin big blockers to acquire indirect control over some shares of Blockstream and become activist (although indirect) shareholders in the corporate entity of their mortal enemy? Might big blockers even pool their funds to aggregate the soon-to-be-tradeable BFX tokens on the open market in the hopes of buying a more unified indirect voice in Blockstream?
If that last point is even a remote possibility, can we expect the AXA supported Blockstream to start breathing down Bitfinex's neck to prevent the conversion of those BFX tokens?
So many interesting questions here. I'm very curious to see how it all plays out.
Insightful - will be adding your article link to my short article on the same subject. Upvoted. Such a small audience here regarding the Bitfinex hack it seems.
Thanks! I appreciate the read and the future link.
Good afternoon. Your article is very useful. I voted for you.
Thank you for reading it!
Great article!