BFX Tokens Issued, Bitfinex decides on Generalized Losses

[BTCManagerOfficial]

https://btcmanager.com/news/bitfinex-decides-on-generalized-losses-issues-bfx-tokens/

[Cryptonitex]

Have a feeling this is going to be bad.

[franky1]

24-48 hours until bank run. everyone removing their bitcoin and only leaving the "tokens" in there to play with, in a hope they can eventually convert these "tokens" into real bitcoin too.

cryptorush done the exact same thing. tried to reopen using tokens but everyone was in a mad rush to get their coin out

[Kprawn]

It's game over for them... you cannot make that many mistakes and then make people share the losses even if they were not hacked. The moment when they open for business, people will be pulling

their coins, and they will bankrupt within the next week after that. I hope some of the other services can learn something from their mistakes... DO NOT use hot wallets to store your customers coins,

and beef up your security, because one breach can take you down... 

[Nagle]

Want to bet there will be "withdrawal delays" when they reopen?

[talks_cheep]

They will try to entice users with some other gimmicks, remember MtGox's last days/weeks/months. Bfx will end up being MtGox V2. It will take months for them to go down, just like mtgox. Maybe they have Willy the Bot V2 running already. Greedy f*ckers will still send money to try to make quick bucks there. I hope they lose their shirts. These folks never learn.

[franky1]

once bitfinex starts using new users funds to try covering old balances(in the form of tokens).. automatically its a ponzi and things get nasty

[unamis76]

This was kind of expected, to be fair... Tokens, where have we seen this happen... Let's see how this goes.

once bitfinex starts using new users funds to try covering old balances(in the form of tokens).. automatically its a ponzi and things get nasty

Well they be doing such a thing? I thought this is what they didn't want

[franky1]

This was kind of expected, to be fair... Tokens, where have we seen this happen... Let's see how this goes.

once bitfinex starts using new users funds to try covering old balances(in the form of tokens).. automatically its a ponzi and things get nasty

Well they be doing such a thing? I thought this is what they didn't want

well im "hoping" the tokens work like company shares. where the tokens are reimbursed as bitcoins using the trade fee's income that bitfinex gets.. not robbing new customers deposits to pay existing customers withdrawals (the cryptorush ponzi i described in last post).. but instead the tokens are valued on the cashflow of bitfinex's income/profits from their fees.
thats my hope from a moral and legal side.. however lets do the maths on timescales to get reimbursed morally and in a legit way

so say a trade fee is, maker: 0.1% taker: 0.2% that's 0.3% fee per trade bit finex gets. now then, knowing bitfinex needs to continue operating (paying server costs, staff, electric and offices, etc) i would presume that on the better and legit option of the share theory. only 0.1% or less of each trade would go into a reimbursement pot and the other 0.2% covers business costs to continue running..

lets say trade volume was 10,000btc a day... thats only 10btc a day into the reimbursment pot (0.1% of 10kvolume)
if the numbers are right that 100kbtc was stolen/hacked/insider job/whatever.. it would take 10,000 days to repay everyone (~30 years)

lets say trade volume was 100,000btc a day. thats only 100btc a day into the pot (0.1% of 100kvolume)
if the numbers are right that 100kbtc was stolen.. 1,000 days to repay everyone (~3 years)

and obviously if they manage to do 300k volume.. ~1 year reimbusement of 100k theft/hack..

but if i see they say everyone will be paid off in weeks/months.. then the reasons would be:
1. ponzi - using new deposits to reimburse existing customers withdrawals
2. reserves - bitfinex using their own funds from the last 3 years trade fee's (doubt it as that moneys normally already spent on running costs)

[Arcteryx]

Tokens
That is what the casinos give out in exchange for your REAL MONEY.
What is this a joke? 
I am sure that they will be getting a lot lawyers calling their offices come Monday to find out the meaning of this mockery.

[franky1]

Tokens
That is what the casinos give out in exchange for your REAL MONEY.
What is this a joke? 
I am sure that they will be getting a lot lawyers calling their offices come Monday to find out the meaning of this mockery.

they describe it as a "share" scheme but dont want to actually offer real shares in their company.. so.."tokens" is their chosen word.. still iffy.. lets wait and see how they implement it and what promises they give for reimbursement to people

[mayax]

Tokens
That is what the casinos give out in exchange for your REAL MONEY.
What is this a joke? 
I am sure that they will be getting a lot lawyers calling their offices come Monday to find out the meaning of this mockery.

there are many kids around here who are afraid of them self. they will accept any shit Bitfinex will say instead of filling complaints against them.

[franky1]

Tokens
That is what the casinos give out in exchange for your REAL MONEY.
What is this a joke?  
I am sure that they will be getting a lot lawyers calling their offices come Monday to find out the meaning of this mockery.

there are many kids around here who are afraid of them self. they will accept any shit Bitfinex will say instead of filling complaints against them.

filing a complaint can lead to bankruptcy route.. that in itself has its own issues and headaches for those at loss, so here is some advice
1. when bitfinex opens.. withdraw your "available" bitcoins. (you dont want your "available" funds locked in for years, if they file bankruptcy)
2. treat it as a 36.067% total loss for now. and take a rest for a few days, chill out
3. look at how/why/when/if there will be any reimbursment via the tokens (i gave tips in previous posts about what to look out for).
4. decide if you trust a bankruptcy hearing which will give you pennies on the dollar in a couple years or bitfinex will give you pennies on the dollar.

usually if you start the litigation route. your access to 'supposed' funds are locked until a hearing is complete. meaning no one gets paid anything anytime soon even if they left real bitcoin balance on bitfinex.. its ALL frozen(remember to do point 1 first)

try not to think that you will be made whole again in months and do not make emotional decisions on the false belief of being able somehow to be made whole again in a few months. think long and hard about choices

treat it as a total loss for now(short term). as a possible payment of pennies on the dollar in the future(longterm). and anything else ontop is a bonus(dream but no promise)

[pooya87]

this is just desperate fuss of a drowning man who is trying to gasp for air.
they have gone under and nothing is going to bring them back to life again. even if they come back nobody will trust them enough with their money any more.

[franky1]

seems the tale is getting a little longer..
https://www.cryptocoinsnews.com/bitfinexs-ceo-seemingly-tried-start-ponzi-scheme/

[smoothie]

It's game over for them... you cannot make that many mistakes and then make people share the losses even if they were not hacked. The moment when they open for business, people will be pulling

their coins, and they will bankrupt within the next week after that. I hope some of the other services can learn something from their mistakes... DO NOT use hot wallets to store your customers coins,

and beef up your security, because one breach can take you down...  

Or....

institute a 5 BTC (or whatever arbitrary number) withdrawal limit per 24 hour period.

This would stop the bleeding...but keep some customers at bay...

Bitfinex is insolvent, and they are hoping to recoup losses by playing games with their customers. I suspect lots of lawsuits to follow in the coming months and years.

[Bostonias]

Why not the Bitfinex owner or the operators take the loss as well? They have made profits from the trading and it is their fault to lose the money.

[Decoded]

Why not the Bitfinex owner or the operators take the loss as well? They have made profits from the trading and it is their fault to lose the money.

They probably made profits, yes. I doubt they will spend all of it in the reimbursement. And their profits probably aren't even near 75 million.

[doublemore]

once bitfinex starts using new users funds to try covering old balances(in the form of tokens).. automatically its a ponzi and things get nasty

I can see that token price going up pretty high if they do it right and make a market for it.  People now have the ability to invest in finex which is the best exchange like it or not.  Finex might not actually push for a deal with investor before they have to issue token and give back 100% to keep people out of being share holders.  Its makes them work, i like it.

[nwfella]

once bitfinex starts using new users funds to try covering old balances(in the form of tokens).. automatically its a ponzi and things get nasty

I can see that token price going up pretty high if they do it right and make a market for it.  People now have the ability to invest in finex which is the best exchange like it or not.  Finex might not actually push for a deal with investor before they have to issue token and give back 100% to keep people out of being share holders.  Its makes them work, i like it.

Sadly however this offer isn't being extended to US residents.  Essentially punishing residents of the states and providing no other option that I can see thus far other than redeeming at present value.