Bitfinex legal obligations to users

[Azael]

I'm looking for answers here by someone in the know about bankruptcy laws. Bitfinex has lost 120,000 BTC but not their ETH ETC and LTC USD etc. Let's assume they are insolvent which to me seems probable.

Does this mean they have to liquidate all their assets to cover their entire customers equally? So sell off all their alts and then spread the BTC or USD across their customers.


To not make this complex we should replace cryptocurrency with currency i.e look at exchanges in USD EUR and other assets where there is precedent.

This is paramount to trading in the markets right now. Appreciate any help.

[1714726375]

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[spain cool]

bitcoin dumping

[iamnotback]

I don't think the non-BTC accounts are protected. Even if they were also segregated accounts, the bankrupty of Bitfinex should view all segregrated accounts in equal legal standing, thus they all must suffer proportionally.

The theft is Bitfinex's liability.

So all non-BTC accounts on Bitfinex should be affected proportionally. I presume Bitfinex will eventually realize this. Unless law is somehow different in Hong Kong.

I presume the knee-jerk selloff of BTC is an overreaction. Bitfinex still has significant resources, so everyone on Bitfinex should probably get a loss but not a total loss.

[BTC-BTC-BTC]

That is about 70 Million USD. No company will be able to come up with that kind of Money right away to pay off all their users. Most likely will closed the exchange.

[snipertrader]

I'm looking for answers here by someone in the know about bankruptcy laws. Bitfinex has lost 120,000 BTC but not their ETH ETC and LTC USD etc. Let's assume they are insolvent which to me seems probable.

Does this mean they have to liquidate all their assets to cover their entire customers equally? So sell off all their alts and then spread the BTC or USD across their customers.


To not make this complex we should replace cryptocurrency with currency i.e look at exchanges in USD EUR and other assets where there is precedent.

This is paramount to trading in the markets right now. Appreciate any help.

after hack what is money client can witdraw or not
market still open offline or close market

[Azael]

That is about 70 Million USD. No company will be able to come up with that kind of Money right away to pay off all their users. Most likely will closed the exchange.

So do the Bitcoin holders lose everything or do Bitfinex liquidate LTC ETH and ETC to cover every customer equally? That was the question.

[BigBadBull]

That is about 70 Million USD. No company will be able to come up with that kind of Money right away to pay off all their users. Most likely will closed the exchange.

Volkswaggon was fined to the tune of 10B and they are doing just fine. Apple could pay that off on a lunch break. Lost of companies have deep pockets. Soon we'll see how deep the pockets of bitfinex go.

[bbc.reporter]

That is about 70 Million USD. No company will be able to come up with that kind of Money right away to pay off all their users. Most likely will closed the exchange.

This will surely happen. I expect all volume will go back to bitstamp.net now because they were the one affected when BFX got more popular. They will have to declare bankruptcy and sell their assets to pay off their customers. There is also a problem surfacing that they were running an illegal exchange operating without a proper license. So that will complicate matters.

[bbc.reporter]

I don't think the non-BTC accounts are protected. Even if they were also segregated accounts, the bankrupty of Bitfinex should view all segregrated accounts in equal legal standing, thus they all must suffer proportionally.

The theft is Bitfinex's liability.

So all non-BTC accounts on Bitfinex should be affected proportionally. I presume Bitfinex will eventually realize this. Unless law is somehow different in Hong Kong.

I presume the knee-jerk selloff of BTC is an overreaction. Bitfinex still has significant resources, so everyone on Bitfinex should probably get a loss but not a total loss.

Yes. The sell off is an overreaction. But the problem is there is no buying demand in bitcoins recently so I speculate we will not see this quickly move up above $600 for now. What do you think?

[BigBadBull]

I don't think the non-BTC accounts are protected. Even if they were also segregated accounts, the bankrupty of Bitfinex should view all segregrated accounts in equal legal standing, thus they all must suffer proportionally.

The theft is Bitfinex's liability.

So all non-BTC accounts on Bitfinex should be affected proportionally. I presume Bitfinex will eventually realize this. Unless law is somehow different in Hong Kong.

I presume the knee-jerk selloff of BTC is an overreaction. Bitfinex still has significant resources, so everyone on Bitfinex should probably get a loss but not a total loss.

Yes. The sell off is an overreaction. But the problem is there is no buying demand in bitcoins recently so I speculate we will not see this quickly move up above $600 for now. What do you think?

Yes we will. The pumpers are still in control. They are bigger then a few hundred k btc.

[bbc.reporter]

I don't think the non-BTC accounts are protected. Even if they were also segregated accounts, the bankrupty of Bitfinex should view all segregrated accounts in equal legal standing, thus they all must suffer proportionally.

The theft is Bitfinex's liability.

So all non-BTC accounts on Bitfinex should be affected proportionally. I presume Bitfinex will eventually realize this. Unless law is somehow different in Hong Kong.

I presume the knee-jerk selloff of BTC is an overreaction. Bitfinex still has significant resources, so everyone on Bitfinex should probably get a loss but not a total loss.

Yes. The sell off is an overreaction. But the problem is there is no buying demand in bitcoins recently so I speculate we will not see this quickly move up above $600 for now. What do you think?

Yes we will. The pumpers are still in control. They are bigger then a few hundred k btc.

But the price of bitcoin was already not going higher anymore before the hack. It was already weakening because there was already a lack in demand. Now the miners will have no choice but to sell more of their mining earnings and savings because of the lower price and the halving of their rewards. This is of course only speculation.

[iamnotback]

I don't think the non-BTC accounts are protected. Even if they were also segregated accounts, the bankrupty of Bitfinex should view all segregrated accounts in equal legal standing, thus they all must suffer proportionally.

The theft is Bitfinex's liability.

So all non-BTC accounts on Bitfinex should be affected proportionally. I presume Bitfinex will eventually realize this. Unless law is somehow different in Hong Kong.

I presume the knee-jerk selloff of BTC is an overreaction. Bitfinex still has significant resources, so everyone on Bitfinex should probably get a loss but not a total loss.

Yes. The sell off is an overreaction. But the problem is there is no buying demand in bitcoins recently so I speculate we will not see this quickly move up above $600 for now. What do you think?

Yes we will. The pumpers are still in control. They are bigger then a few hundred k btc.

But the price of bitcoin was already not going higher anymore before the hack. It was already weakening because there was already a lack in demand. Now the miners will have no choice but to sell more of their mining earnings and savings because of the lower price and the halving of their rewards. This is of course only speculation.

What about those cashing out of the ETC rise? Where can that amount of money go next? Don't tell me Steem as it has insufficient volume and it will debase you 100% over the next several months, unless you power up and commit to 1 year cash out weighted window.

Synereo says they have a launch coming in September, but that can't absorb all those funds can it?

Everything plummeting except for ETC:

http://coinmarketcap.com/

[kame]

is there any statement from hacker yet? another hardfolk happening to ETC???

[nmtrader100]

They cannot cover the amount stolen, therefore they are bankrupt.  Like mtgox, the loss will be spread across all accounts regardless of your holdings on bitfinex.  A huge chuck will be taken out for legal fees also, and like gox it will be years before it all is resolved and anyone gets anything back at all.  Basically, if you had an account at bitfinex, you got goxed.

[bbc.reporter]

I don't think the non-BTC accounts are protected. Even if they were also segregated accounts, the bankrupty of Bitfinex should view all segregrated accounts in equal legal standing, thus they all must suffer proportionally.

The theft is Bitfinex's liability.

So all non-BTC accounts on Bitfinex should be affected proportionally. I presume Bitfinex will eventually realize this. Unless law is somehow different in Hong Kong.

I presume the knee-jerk selloff of BTC is an overreaction. Bitfinex still has significant resources, so everyone on Bitfinex should probably get a loss but not a total loss.

Yes. The sell off is an overreaction. But the problem is there is no buying demand in bitcoins recently so I speculate we will not see this quickly move up above $600 for now. What do you think?

Yes we will. The pumpers are still in control. They are bigger then a few hundred k btc.

But the price of bitcoin was already not going higher anymore before the hack. It was already weakening because there was already a lack in demand. Now the miners will have no choice but to sell more of their mining earnings and savings because of the lower price and the halving of their rewards. This is of course only speculation.

What about those cashing out of the ETC rise? Where can that amount of money go next? Don't tell me Steem as it has insufficient volume and it will debase you 100% over the next several months, unless you power up and commit to 1 year cash out weighted window.

Synereo says they have a launch coming in September, but that can't absorb all those funds can it?

Everything plummeting except for ETC:

http://coinmarketcap.com/

I do not understand where rise will fit in. In my mind the miners will sell bitcoins for fiat in order to maintain mining operations. Since the price is now lower and the mining reward is halved the miners will now have to sell more bitcoins in the market making it hard for it to come back above $600. It is because the bitcoin price rise was already weakening and it was time for it to go down. It would have still gotten down if the hack did not happen. Just an opinion.

[dinofelis]

That is about 70 Million USD. No company will be able to come up with that kind of Money right away to pay off all their users. Most likely will closed the exchange.

Bitcoin should fork and restore the funds to bitfinex ! 

[numismatist]

I do not understand where rise will fit in. In my mind the miners will sell bitcoins for fiat in order to maintain mining operations. Since the price is now lower and the mining reward is halved the miners will now have to sell more bitcoins in the market making it hard for it to come back above $600. It is because the bitcoin price rise was already weakening and it was time for it to go down. It would have still gotten down if the hack did not happen. Just an opinion.

Some argue that the scene will not recover from another Gox event. That's true. No sense in buying stolen coins again, and again and again. Each time paying oh-so-evil FIAT cash.

[EBK1000]

My understanding is that Bitcoins can be traced or otherwise identified, so why couldn't these 120,000 BTC be "banned" by all the exchanges based on some criteria or the identity of the coins that were stolen?

[Carlsen]

My understanding is that Bitcoins can be traced or otherwise identified, so why couldn't these 120,000 BTC be "banned" by all the exchanges based on some criteria or the identity of the coins that were stolen?

I suppose that those coins went already into other currencies (maybe etc, if you look at the traded volumes yesterday).
This simply went too fast to react on it in any way.
And I do not think that any exchange would willingly reject coins they can make profit with.

[Minecache]

That is about 70 Million USD. No company will be able to come up with that kind of Money right away to pay off all their users. Most likely will closed the exchange.

So do the Bitcoin holders lose everything or do Bitfinex liquidate LTC ETH and ETC to cover every customer equally? That was the question.

We are likely to see Bitfinex liquidate their ETC criminal coin hodlings to recoup the stolen BTC.