Bitfinex Completes Buyback of Reimbursement Tokens

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Bitfinex has announced that it has completed its plan to reimburse customers who had suffered losses in the August 2016 hack of the digital currency exchange. The ambitious reimbursement plan involved the issuance of cryptographic tokens (BFX) that served as a form of equity obligation – a digital IOU of sorts. Yesterday, the company declared that it would be reimbursing all affected customers, purchasing those issued tokens with US dollars.

The redemption effort consisted of an exchange of $1 for each BFX token. The exchange announcement laid out the entire reimbursement process, which included a temporary pause of all platform withdrawals, automatic settlements, margin liquidations, and wallet transactions during the settlement. The conversion was scheduled to be achieved on a one-to-one basis, with all tokens redeemed at a rate of one dollar apiece.

The Bitfinex hack last August resulted in the loss of 120,000 Bitcoins. Many investors were alarmed at the company’s initial response, which involved an across-the-board customer loss as Bitfinex forced account holders to share the loss with a uniform 36% reduction in each investor’s holdings. The BFX tokens were then provided to those customers – along with a promise of eventual repayment once the exchange recovered from the financial impact the hack left in its wake.

The announcement included an expression of gratitude to the exchange’s customers:

“Once again, we are deeply grateful for the patience and trust of our customers and shareholders as we worked towards—and have achieved—full recovery in just eight months. Without the community’s support, Bitfinex could have easily become a footnote in the history of the digital token revolution, instead of a leader and trend-setter. Thank you.”

The views expressed by the authors on this site do not necessarily represent the views of DCEBrief or the management team.

Author: Ken Chase

Freelance writer whose interests include topics ranging from technology and finance to politics, fitness, and all things canine. Aspiring polymath, semi-professional skeptic, and passionate advocate for the judicious use of the Oxford comma.

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