Divide it equally: Bitfinex to distribute losses among BTC balances

The exchange representative Zane Tackett informed that the company plans to “socialise” the $72 mln loss between all bitcoin holders. The users not affected by the hack do not seem very happy.

“We are still working out the details so nothing is set in stone, however we are leaning towards a socialized loss scenario among bitcoin balances and active loans to BTCUSD positions. The numbers being quoted are erroneous as nothing has been decided as of yet and we are still in the process of settling positions and balances. More details are to follow tomorrow along with a FAQ answering most of the questions we have been asked over the past couple days,” Zane Tackett wrote on Reddit.

He emphasised that this measure will not affect accounts holding other cryptocurrencies traded on Bitfinex.

Because there was no clear explanation of how exactly the loss distribution would be carried out, this announcement provoked a very controversial reaction among the commenters. Many are indignant that the exchange they find responsible for the hack makes users pay for the robbery.

“Does that then mean that all unopened deposit boxes will be force opened by the bank, and their contents spread among all the robbed deposit box holders? Because that’s what Bitfinex is proposing here. Do you now understand how stupid that analogy is?” says guywithtwohats.

Crypto_Economist42 proposed another comparison they find more correct:

“The proper analogy is equivalent to the bank having 10 vaults of USD, and only one vault is robbed. In this case, the accounts that were stored in the robbed vault can sue the bank for the losses. If they bank can't pay, they are forced into bankruptcy, which means the other 9 vaults become assets that other creditors can claim against.”

Some suggest that Bitfinex bankruptcy would be the best solution for everyone, for it proved incompetent and insolvent. Others argue that “it's been two and a half years since Mt. Gox got hacked and no one has seen a penny, except for lawyers.”

The Hong Kong-based exchange Bitfinex plans to gradually restore user access to the site after the massive security breach, which resulted in the loss of 119,756 bitcoins (0.75% of all bitcoin stock in circulation, according to Reuters). It is considered that the intruders stole some of the company’s digital keys. The exchange announced the suspension of all operations and turned to law enforcement agencies for investigation. Bitfinex promised to settle accounts later at an exchange rate of $604.06 – the BTC price on the night of the attack.