Bitcoin Forum

Title says it all

Bitfinex. Will they cover the 65 million dollar BTC Theft or just fold?

You can comment here. But please take the Poll.

Myself I'd be shocked if they could cover a 65 million dollar btc loss. But the poll will tell here, so feel free to vote.

I never believe they will cover the losing a 65 million dollar, it's very large to cover. learning from the previous cases the hacked exchange site is avoided to cover the loss amount. in my minds, maybe caused by they is not have an enough amount to cover or the intern factor. ::)

Based on what their community relations guy has been saying on bitfinex, they do not currently have sufficient capital to cover all of the losses from today's hack. I would speculate that they are attempting to quickly raise capital in order to make up for whatever shortfall they have.

If they are otherwise unable to raise sufficient capital, then I suspect that they will somehow socialize losses. From what I can tell, they make a lot of BTC from trading commissions, so I don't think it would make sense for them to "fold"

They will fold I am sure. The big question is will they pay back their customers lost funds? There are signs that this will not happen because there are speculations that they do not have enough funds to pay them all. Maybe they will pay some but not all.

Can anybody post who the owners of BitFinex are?

They either need to raise $65M in capital. Unlikely they can do it themselves internally. More likely someone from outside will come it and offer a bailout for a good chunk of their shares.
Give everyone a haircut, and run a fractional reserve with Finextokens in hope they can recover with time and that market will believe them? Depends on % of the haircut, and if it would even be legal? Probably would need major creditors to agree to this?
Or go mtgox, belly up.

I'm guessing 30% someone from outside (coinbase? Winterflosses?) coming in and saving the day, 30% everyone would get a haircut, and 30% they fold

Judging how most of these exchange "hacks" go down, I think the will just take the money and run.
https://www.youtube.com/watch?v=-WCFUGCOLLU (https://www.youtube.com/watch?v=-WCFUGCOLLU)

AS they have said only bitcoin was stolen does that mean wallet with no bitcoin just cash are safe

Even if they raise the 65mil, it will make them weak going forward.  You would have to assume it would be a loan, so they would take on debt, just to get them back to the situation they were in a few days ago.
Sucks for Bitfinex and bitcoin all round.

This has been what's happening in the history of bitcoin exchanges. I wonder how BitFinex accumulated all that trading volume? They surpassed more established exchanges like bitstamp.net and BTCe in volume. Could it be that the numbers they have are manipulated by them?

Wow,another Gox  ::)

well quoting bitfinex,their main priority is secure there site and get back online and sort out customers losses at a later date

i voted They will cover the loss.

this is just my opinion that I am pretty sure they are will cover loss,,I actually I also This impact about Bitfinex i lose much bitcoin yeah so sad but still hope that will be better,,and see price BTC now many losses here bocouse Bitfinex got hacked :(

just my opinion

I don't feel comfortable attempting to answer this poll because it is based on a premature assumption regarding the supposed exact amount that Bitfinex lost in this latest attack, and without even evidence of the remainder of their holdings.

Your right and how could they collect 65 millions and covered to pay their user's lose and im pretty sure that bitfinix cannot do nothing for this bad incident since the hacking issue has been done and if they would pay they will surely struggle for their comeback operation since they might dont have enough funds to start again their site exchange operation, well let see further news to be happen with this since the price of bitcoin has been affected for this sudden bad incident.

i take your point..thus the no frigging idea choice was added it can apply to all the above....

(its not like i really know how to setup a correct poll don't ya know) :)

edit:

below 65 million dollar source link (assuming that holds)



http://thenextweb.com/insider/2016/08/03/bitcoin-bitfinex-75-million-stolen/#gref (http://thenextweb.com/insider/2016/08/03/bitcoin-bitfinex-75-million-stolen/#gref)

I hope they cover the losses somehow but I don't think they can do it, because it is such a huge amount of money that is not easy to part with.
so most probably bitfinex is just going to be added to the list of exchanges that said we were hacked and never seen them any more like cryptsy.

I thought this thread would only be filled with understanding or assumption of each person who is in this forum. Because I see that bitfinex does not give something sure thing, so this is just a first step or action to calm its users and they can get a little quietly to find a way out

Investors getting ready to get shares. I think they will cover it somehow. Hope they do :) We don't want a second gox.

They have confirimed on reddit they lost just over 119 thousand Bitcoin

I understand that a lot of folks are worried about bitfinex for their own coins and just the impact on the bitcoin infrastructure and image, and maybe I can be a bit too much of a nit picker.... but I am really thinking that we don't have enough information.. even though Bitfinex's actions kind of assume a worse case scenario, yet it is not for sure a given that either they lost as much as people are speculating or that they may not have some evidence regarding how they might be able to get them back... anyway, I do think that if they make some kind of representation regarding what happened and what is their plan, we will be in a better position to assess the situation, even if they are less than forthright in their depiction of the situation.

I have no idea, what if they did it from inside and now talking about some hackers. Who can cover 65 million dollars? Probably they will just give one big sorry letter to everyone, full with some excuses.

As I know this is not the first time something like this happening, and for sure not the last time. People should start to be more careful with their money, I never keep my coins on exchangers.

I'm sorry for people who lost their coins, but I doubt they will be refunded. Looks like people should think twice before choosing where they will trade.

That's why the bitcoin price it's going down?

"They?"   I have read a couple of reddit threads that have that theory, but did Bitfinex confirm or admit to the situation? 

I am not trying to negate the potential validity of some investigations done by insightful technical folks, but we really need some kind of confirmation and/or rendition by Bitfinex - and maybe it is true that the Reddit folks are right on the money, but until then, I still consider the matter to be a bit speculative with some potential holes regarding the extent of money moved by whom and who controls the private keys and whether any of those moved coins are recoverable (or the private keys).

https://np.reddit.com/r/BitcoinMarkets/comments/4vtv1m/bitfinex_down_due_to_bitcoin_security_breach/d61oetn

This isn't "folks on reddit". This is Zane Tackett https://www.reddit.com/user/zanetackett, Bitfinex's community relations guy. This is as straight from the horse's mouth as you'll get.

It is confirmed in the just released WSJ article as well.

Time to accept it.

[Where is the: They won't cover, and will fold, option? or is that just implied?]

hey i admit it is a crummy poll I made :(

but the 'thread' seems to be there is no way they can cover that much $$ and survive...but take this poll with a grain of salt..if I had a life I woud not have made it :(

Well Zane says less than 50% of the held bitcoin was taken,no other altcoin was taken and no Cash.I think you will see bitfinex up and running quite quickly.As for how they address the losses now thats another issue but if you had US dollars in your account as I did I think they will still be there.

No one is trying to deny anything, and yep those links that you provided seem to confirm that Bitfinex folks are admitting to the nearly 120k BTC loss, which hopefully also means that at some point in the very near future they are going to be able to provide an update to their status page including an admission to the amount of coins that they lost and maybe other relevant and detailed information that will help, instead of making us have to surf through various reddit threads to figure out what is going on.

Regarding the poll, I do now have enough information to answer it, which I did, and I see the poll results.  There sure is a lot pessimism regarding Bitfinex's ability to cover the losses... Surely, that is a lot of value (i mean the bitcoins) to admit to losing in such a short period of time,,, so yeah, understandable pessimism.

anyone has the hash link from these 120k bitcoins?

Honestly, every single person who lost money there is at fault. Have these people learnt nothing from Mt.Gox? Keeping high amounts of Bitcoin on online services is just a 'theft waiting to happen'. Bitfinex made two mistakes in their setup:
1) No cold-storage layer.
2) No withdrawal limit/sanity check.

---

I couldn't care less whether these people get their money back. I'm more interested in how the hacker managed to get the money out of a multi-signature implementation.

They obviously aren't on 1 address.

https://i.imgur.com/mAxV79A.png

I really don't know how they will handle this situation because that is really a huge amount. If they can cover that, well that would be great. However, if not, then we must learn some lessons from it. Storing bitcoin/money online is always a risk that's why we must consider things like this before deciding to put such amount. Even though I don't have money on Bitfinex, I do hope that they can fix this issue so that customer losses can also be addressed.

Great for who exactly? The ignorant people who kept a large amount of money on a singular service that is online 24/7, which is completely counter-intuitive to securing your own Bitcoin?

I've seen the word "must" hundreds of times, yet most people learn nothing from this. It's time to stop talking and start doing something.

You don't say?

I thats almost $60,000,000++ according to some report,as value varies but still thats a huge amount. Hope they can recover it and continue its operation.Many clients are worried if they can recover thier bitcoin investment. Keep us updated here.

1. According to some sources, which can be considered "trustful", the stolen amount was 119,756 BTC. This is more like $72-75Mn (considering the price of Bitcoin at the time).
2. I'm not sure what was the exact market cap, but the breech is probably the major reason, which wiped out between $1.5Bn and $2Bn in the cryptocurrency market. The loss is not only on Bitfinex, but it is also to day traders, "weak hands" and pretty much everybody. We are talking about 100s of millions $ in "short term losses".

Personally I believe that Bitfinex have the funds to recover the loss, but more important is that cryptocurrencies were hurt in general with another negative impact. Don't exactly remember, but I think that only Karpeles is blamed for the 750k BTC "stolen" from MtGox. What happened next? He spend like a year in jail and was recently released. The way I see it, Bitfinex guys has 3 options:

1. Offer a good bounty for the hacker/s and I really want him to agree on that. The guy is already rich, but it has to protect himself all the time. If I was the hacker/s, I would accept the bounty for everybody's sake.
2. Take whats left (which would be tens of millions $ for sure) on the exchange, take some time in minimum security jail and continue with their lives on the back of everybody who had deposits on the exchange.
3. To (at least) try to restore all of the stolen funds.

I believe that 1st scenario would be best for everybody.

My money's on BitGo being compromised. They used a unique 2-of-3 scheme in which they have (or can get) access to 2 of the keys. At least they did two years ago, and I as far as I know nobody heeded the warnings that this was a stupid idea. ::)

If they have anything left they might give a small amount back but in my opinion they will not pay and fold. hacking Involving BTC is getting worst.

this was posted on another thread ..have not checked it but if true they never multi-sig'd crap ...and will dump it on the customers...likely in their terms of agreement it is your
multisig (supposed) wallet thus your problem

here is the quote..if true imho they will wash their hands of the responsibility imho

We don't use cold storage for bitcoin, since our implementation with bitgo we've used segregated customer wallets so that each user has their own bitcoin wallet.

bitgo is saying they were NOT compromised at this time also I've read

what a cluster

Bitcoin exchanges have it within their power to tell customers who were robbed on their exchange, to go and fuck themselves quite frankly.

That is what Kraken told me, and many other Kraken customers just two weeks ago when a bunch of Kraken accounts got emptied. In all probability, Kraken's Bitgo system got hacked as well, but to a much lower amount, and Kraken covered their losses by robbing 'unprotected' customer accounts, and then blaming the losses on the customers.

I suspect that Bitfinex shall reopen, and in one way or the other, will pass on the losses to it's customers. Either just telling those customers who have seen large chunks of Bitcoin leave their Bitfinex wallet addresses, 'tough shit', ya all have been bumped, or they will socialise the losses, and everyone takes a haircut.

Bitfinex was by far the major and most liquid USD exchange. I suspect that the operators/owners of the exchange will resist just lying down and dying right away.....they will hobble along on life support for a while yet.

I would think they would just cut their losses and just file for bankruptcy to not have a slue of lawsuits that are fourth coming.
You don't think people who lost their coins will just sit back and forget that this exchange allowed their funds and undoubtedly their personal information to be stolen and not take legal action is beyond me to believe. ::)

You are assuming that people are going to lose their coins.  We don't know that, yet.  Sure someone is going to lose, but details are still quite speculative, especially when they are saying that customers are going to be able to verify their accounts and also they are developing plans to go live again at some point in the near future.

they don't seem to have ran away and close shop cause they are still announcing things on their status website.

but again this has been the scenario  with all the previous similar hacks, they waste some time for a while and say we are pursuing things and then after a couple of months of trolling they disappear.

This may be of interest:
https://www.reddit.com/r/Bitcoin/comments/4w5fdz/collection_of_relevant_bitfinex_corporate/

Thanks Tzupy bear... . That seems to be a pretty helpful thread to follow and/or contribute to in the event that anyone has useful information.

If you look on the reddit thread: https://www.reddit.com/user/zanetackett?count=25&after=t1_d64q4dv

Bitfinex are basically going to socialise the loss amongst all those who were holding BTC, or had USD lent out to margin traders, or who had USD tied up in margin short trades, whilst assuming none of the losses themselves. Those who simply had USD sitting on Bitfinex, will not be affected, because basically, that money is sitting in a Dallas bank, was not stolen, and Bitfinex would have no legal right to redistribute that money.

So all Bitfinex users who were active in the market at the time of the hacks, are going to take a hit. Those who simply had USD sitting in their accounts, that was not being lent out, or used in a margin trade, are safe, and of course, according to the rules that Bitfinex have decided to run with, Bitfinex themselves, are safe......lawsuits from a consortium of raging mad whales notwithstanding.

I am sure all those who are going to be forced to take a 60%+ haircut on what might have been their life savings + bank debt, will be delighted to hear that Bitfinex will live to trade another day.... Long Live Bitfinex!   (lol)

Thanks.  I read through quite a bit of that thread, too, and I got a lot of the same impression as you regarding their not mixing assets.
 I personally believe that in the end, a representation that they are not mixing assets would likely save bitfinex a lot of complications by NOT mixing different asset classes.. 

Yes, I saw the part about haircut, too, but they did not specify the amount of the haircut.

 if they are conceptualizing scenarios in which their customers are taking losses for their lack of security, then that kind of a conceptualization would have a considerable chance of losing them credibility and good will under their current and potentially future customers.

According to the post, we will find out more of the nitty gritty details tomorrow, no?

Marvelous, I get to take a hit on my 249.00 USD and .26BTC that was involved in margin lending on Bitfinex. All so Bitfinex can discover that their multi signature wallet scheme with Bitgo was a no go. Thanks Bitfinex, BitGo and black hat hacker. I hope you all find a way to hang yourselves with the 120k BTC. ::)
At least this was nowhere near my life savings. :D

Cover it?  I highly doubt that. A normal company would have insurance for this sort of thing, and I doubt bitfinex has anything of the sort.  Any exchange should have security such that this wouldn't happen in the first place especially with bitcoin.  This is just further evidence that the people running these exchanges are fucking morons at best.  Criminals and scammers is a more apt description.

The simple fact that they weren't using a cold wallet layer makes it clear that there were idiots in charge of bifinex (in)security. ...sorry but "CFTC said so" doesn't cut it...the CFTC is a complete joke.

...and for the love of all that's holy I cannot figure out why people continue to STUPIDLY send huge numbers of bitcoins to exchanges and leave them there. How many robberies does it take before people grow a damn brain cell or three?

yeah that is the assumption here is my reply on this in another thread that includes my 'guesses' and the biftinex terms of service link (cached)

https://bitcointalk.org/index.php?topic=1573336.msg15823772#msg15823772 (https://bitcointalk.org/index.php?topic=1573336.msg15823772#msg15823772)

terms of service cache alone less my rant from above (cached original is down)

https://webcache.googleusercontent.com/search?q=cache:DMFWehppBtkJ:https://www.bitfinex.com/terms+&cd=1&hl=en&ct=clnk&gl=us (https://webcache.googleusercontent.com/search?q=cache:DMFWehppBtkJ:https://www.bitfinex.com/terms+&cd=1&hl=en&ct=clnk&gl=us)

Their terms of service state in this ONE line all that matters.

There is no guarantee against losses on the Site.

You can read thru the rest of the agreement.....but the users of bitfinex will sue them ...bitfinex will sue bitgo......bitgo will sue back etc etc and what will all come out in the
wash one way or another is again from my previous link above rant..is they will not have the funds to refund even if they wished and bitfinex the corporation will take the fall
and all the users eat the losses etc

imho

the only way out is make a deal with the hacker for 10% loss .....otherwise .....bitfinex will simply go bankrupt imho and wash their hands of it all.

hope I'm wrong and another way out but I just don't see it

They will fold within 6 months anyway.

Are any of you going to send your BTC to a company that would have 120k BTC's sitting out of colds storage?

They cut costs on security and it's the users that are paying for it.

Plus......
 

inside job anyone???  ::)

1) I know that one thing is that you wanted to make a point in respects to my earlier point, (which happened to be 36 hours prior to your citing it), and since this is an evolving issue, it seems a bit inaccurate to cite my 36 hours ago, when new information has come out.

2) reliance on the terms of service may be a bit much because the terms of service are going to be written in a way to protect the company from liability, yet if they want to stay in business or create an impression of solvency, they have to bear some of the burden of the loss of coins (ideally most of the burden) - otherwise they will risk a run on the bank.


3) we are going find out more details regarding their proposed path forward in the next 24 hours, at least that's what they say.



Sure.. seems very plausible.

Was the hacker taking individual user's btc out of every single hot wallet? Or were users btc addresses merely a proxy from which the site deposited and withdrew to from a single larger address (that was hacked)

I don't really believe anything any more. Could've been anyone.

they are going to fold anyways, it may take a long time and they can drag it as long as they want but they will fold on the end no matter what happens.


my bet is that it was indeed an inside job, and it usually is true too.

Latest from zanetackett: Losses will be shared among btc holders and those with USD backing BTCUSD margin positions.

It is not clear if by margin positions they mean only longs or also shorts (in which case  >:().

If their servers weren't compromised, they may as well have been. Clearly, their entire security infrastructure was bypassed. Auto-signing transactions that appear to have drained upwards of 60% of the client's bitcoin wallets is complete insanity.

If BitGo did not enforce Bitfinex's limits, they are liable for the brunt of this theft. And the lack of communication from BitGo is just pathetic. Everyone who uses a BitGo service (like Kraken, Bitstamp, Poloniex, etc) should fear for their security.

From his earlier comments, I am very confident that USD lenders with funds tied to stolen BTC will take a haircut. He has not been as forthright about BTC lenders in the opposite situation. Based on Bitfinex's logic, BTC lenders with outstanding loans were holding USD debt (for USD which was not stolen). But it's not clear what will happen.

I would say that bitfinex needs just some time to see if they can find the stolen bitcoin and I believe that they will continue because they have lots of users and those users doesn't have only bitcoin but also othercoins and/or fiat. It's really sad to see another cryptsy but seems that BitGo and bitfinex have lose some trust with this action.

That isn't gonna happen. The coins haven't even moved, and if the hacker is smart, they won't move them until long after this debacle is done with. He won't be dumb enough to sell on exchanges, given how sophisticated the attack was.

Basically, we are hoping an investor swoops in and re-capitalizes the company. Bitfinex's owners won't like the offers they are receiving (probably in the range of $60mm for full ownership), which is why they are talking haircuts.

Next, we are hoping that owners give back significant profits to make a haircut less painful, while securing a plan to repay the debt over time. Hopefuly this would be accompanied by some level of investor recapitalization, to minimize the amount outstanding and thus, minimize the amount of potential litigants moving against them.

I don't want to see this end in bankruptcy. We've seen what happens with Gox. The bankruptcy industry will bleed the assets down to nothing over years, and at the end, customer depositors will be at the end of a long list of creditors. We will get nothing. That's if you could even find the Bitfinex owners and secure the remaining assets. Big if.

I'm just praying I get something back, and in the next few weeks -- not a few years from now from bankruptcy proceedings.