After this week’s hack of nearly 120,000 bitcoins from Hong Kong-based Bitfinex exchange, attention is turning to how victims of the fraud will be compensated, if it all.
A key question for account holders concerns their legal rights after a loss in the region of $70m. Bitfinex is yet to announce details, but Zane Tackett, the company’s director of community and product development, has been posting messages on online forums suggesting some losses will have to be socialised among users.“We are still working out the details, so nothing is set in stone; however, we are leaning towards a socialised loss scenario among bitcoin balances and active loans to BTCUSD [bitcoin US dollar] positions,” Tackett wrote on the Reddit forum early on Friday.
For the legal profession, however, the pivotal factor rests on whether the title of the lost bitcoin belonged to the customers or to Bitfinex when it was stolen. A secondary condition that must also be determined is whether the bitcoins were commingled or segregated when the theft occurred.
The best legal precedent to date is that of the liquidation of Mt. Gox in February 2014 when nearly 850,000 bitcoins worth some $450m were lost. In that case the company was held accountable for losses because title had been transferred to the exchange and funds had been commingled. Victims are still pursuing their claims over the remaining estate.
http://www.ft.com/cms/s/0/c3b9f89c-5b18-11e6-9f70-badea1b336d4.html#axzz4GYWxliki
