Bitfinex legal obligations to users

[illyiller]

They are trying to avoid prosecution by the SEC with a rule that U.S. people can only sell BFX tokens, but they cannot buy BFX tokens. Bitfinex will argue that they aren't allowing US people to trade them because they can't buy and sell them. I don't think that strategy will work, the SEC will probably prosecute them anyway.

I'm pretty sure that strategy will blow up their face. The point of contention, I'm fairly sure, is the issuance of the unregistered securities. These are pretty clearly some kind of bond (whether convertible or not), so I can't imagine a sound legal argument that they aren't securities (at least under US law). I'm guessing the SEC will eventually come down on them (perhaps even shut them down), but US agencies take months and months to build a case and act.

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[Das]

There should be regulations put in place ensuring that all exchanges have insurance against hacks.

If an exchange is hacked, customers will be refunded by the insurance company.

[pawel7777]

There should be regulations put in place ensuring that all exchanges have insurance against hacks.

If an exchange is hacked, customers will be refunded by the insurance company.

That would be great, but costs of such insurance would likely be huge (if it was to cover 100% of customers' deposits) and those costs would be pushed on to customers in the form of higher fees. And if the hack happens it would probably take rather long time till insurer actually pays out.

Maybe it would make more sense for large exchanges to build up their own fiat money reserve designated to cover losses of potential hacks.

[secattorney]

One would generally be advised to not assume any tangible recovery from a bankruptcy or common law liquidation. HK follows the British common law with some exceptions in deference to China's civil statutes. The US is largely based on British common law but have some 150+ years of our own. That said, pursuing an individual claim may (at this stage) appear more valuable.

The trick is that, while one could in theory sue in any Federal jurisdication in the country, you would have to assume there are assets held in the US collect on any judgment - and that can include anything you can consider; bank accounts, payment processor balances, accounts receivable, IP, etc. Given the similarity with HK law, domesticating that judgment (as I have seen it done) is not terribly difficult to accomplish

In essense, this is the proverbial race to the courthouse.

[Snorek]

Speaking about legal obligation to users. Is Bitfinex refunded stolen BTC the users in any way?
Last time I heard about their 'refund' proposal, they were trying to force some sort of "token" refund system instead of simply paying customers their coins back.

Is there are new info about this?

[Quickseller]

Speaking about legal obligation to users. Is Bitfinex refunded stolen BTC the users in any way?

They previously paid out roughly 1% of the losses to customers about a week ago. They are currently attempting to raise money via an equity sale to have sufficient funds to make their customers whole.