US government says funds from 2016 hack should return to Bitfinex

[Oshosondy]

I thought it has been announced that the money would be given to the victims of the 2016 Bitfinex hack and I thought they have started giving people the money until I saw this today.

Due to a prior reimbursement plan from Bitfinex, many victims of the 2016 hack do not legally qualify as victims eligible for reimbursement.

Attorneys for the US government recently submitted a motion requesting that the Bitcoin forfeited as a result of the 2016 Bitfinex hack should be returned to the cryptocurrency exchange.

The Jan. 14 legal filing stipulated the return of approximately 94,643 BTC and unspecified amounts of Bitcoin Cash, Bitcoin Satoshi Vision and Bitcoin Gold generated through hard forks back to the exchange on an in-kind basis.

I think if the coins are given to Bitfinex, it is better. Bitfinex will know better how to distribute the coins to the victims. What do you think?

[logfiles]

The problem is I don't think KYC was so much of a thing back then and most traders preferred anonymity, so even for Bitfinex, it will be so hard to determine who were the legitimate and illegitimate users if there was no proper KYC protocol.

To some people, this will still be unfair as they will end up being ineligible to claim their own funds as they will face a number of verifications. Overall, the exchange will be the one smiling.

[terrific]

I think if the coins are given to Bitfinex, it is better. Bitfinex will know better how to distribute the coins to the victims. What do you think?

I agree, they can do better if it's going to be refunded to the rightful owner of it. But for sure that they'll get significant amount of money in here as well. With all of the years that went through, many have happened and a portion of these claimants won't have any eagerness anymore to get that file and claim. And with all of the forks that happened with the holdings that they have, there's a sure pile of cash that they can simply generate after selling them and that's the amount that they will distribute for the eligible claimants. Let's see the developing process on this one.

[Strongkored]

Giving the coins to Bitfinex so that they distribute to their verified eligible users to get the coins could be the best option. However, Bitfinex will definitely create a very strict regulation or verification system that can frustrate its users and eventually choose not to claim their coins, so in this case the real winner is the exchange.

[Darker45]

I think the quandary at the moment is not to whom the recovered funds should be given for distribution; it's who owns the recovered funds. As far as the distribution is concerned, I think Bitfinex will be given the task. But the controversy of the latest development is the motion that the money lawfully belongs to Bitfinex and not to its users.

It's an interesting case. But I don't think it's fair to distribute to the victims all funds recovered from the hack. Neither is it fair for the funds to just go to Bitfinex alone.

Bitfinex has already more or less compensated the losses of those affected users, not fully but fairly, at least as far as the legal arrangement is concerned at that time. In other words, Bitfinex has already shelled out money to pay for the victims.

So, the recovered funds should be shared with Bitfinex and the victims, but the latter should only be receiving the amount not covered by the previous reimbursement.

[coupable]

Giving the coins to Bitfinex so that they distribute to their verified eligible users to get the coins could be the best option. However, Bitfinex will definitely create a very strict regulation or verification system that can frustrate its users and eventually choose not to claim their coins, so in this case the real winner is the exchange.

There doesn't seem to be a better solution than this at the moment if there is a will to compensate those affected. The platform is the only one capable of activating this by watering down the user data registered with it even if kyc procedures were not imposed at that time, as it can be verified by relying on the addresses used for deposits and withdrawals. Certainly not everyone will be able to prove their loss, but it doesn't seem that the platform can do more.