iFinex’s $150M Gesture: Making Amends with Bitfinex Hack Victims

Bitfinex, the renowned crypto exchange that faced a $71 million hack in 2016, is taking a remarkable step to make amends with those affected by the breach. In an extraordinary move, Bitfinex’s parent company, iFinex, has unveiled a plan to buy back $150 million worth of the company’s shares that were initially offered as compensation to victims of the 2016 Bitfinex hack.

Specifics:

  • Financial Redemption: iFinex’s proposal outlines a purchase price of $10 per share, aiming to acquire the 15 million shares distributed as compensation in the aftermath of the hack. This initiative is a testament to iFinex’s commitment to righting the wrongs of the past.
  • 2016 Hack Recap: In 2016, Bitfinex experienced a major security breach, resulting in a loss of roughly 36% of its total user balances, primarily in Bitcoin. At the time, the crypto exchange lacked the necessary funds to fully compensate affected users.
  • Unique Compensation: To make users whole, Bitfinex introduced a novel approach. Instead of traditional cash compensation, they provided recovery-right-tokens (RRT) and equity in the form of iFinex shares. Users were given the choice between these two compensation options.
  • Collaboration with BnkToTheFuture: The iFinex shares were distributed as part of a collaborative stock swap deal with the investing platform BnkToTheFuture. This arrangement allowed affected users to exchange RRT BFX tokens for shares in the company, significantly elevating iFinex’s valuation from $120 million to $1.7 billion.
  • Positive Performance: iFinex attributes the buyback program to its remarkable positive performance in recent years, turning these shares into a potentially valuable asset for investors.
  • Buyback Terms: While a select group of iFinex directors and affiliates are eligible for the buyback program, there is no minimum requirement for shares to be sold. The parent company is willing to purchase as many shares as are made available until reaching the $150 million maximum. Shareholders have until October 24 to decide whether to partake in this redemption opportunity.

This initiative is a significant development in the world of cryptocurrency, offering a unique path to compensation for those affected by the 2016 Bitfinex hack.