[2016-08-15] ToI: Here's why Bitfinex's recovery plan may not succeed

[polynesia]

Bitcoin theft: Here's why Bitfinex's recovery plan may not succeed

http://timesofindia.indiatimes.com/tech/tech-news/Bitcoin-theft-Heres-why-Bitfinexs-recovery-plan-may-not-succeed/articleshow/53708297.cms

The Hong Kong-based exchange said on August 2 that hackers had stolen 119,756 from some clients' accounts, the second-biggest such hack in dollar terms, and later said it would spread the losses across all its customers, whether or not they had been hacked or even held bitcoin. It said customers would forfeit 36% of their holdings and be given "BFX tokens" instead that could be redeemed by the exchange or converted to shares in its parent company iFinex.

Both elements of the plan are open to legal challenge, lawyers said. Imposing losses on customers who were not hacked appears to go against the company's terms of service, said Ryan Straus, a Fenwick & West lawyer who advises financial technology companies on regulation and co-authored the US chapter of a book on bitcoin law.

[philiveyjr]

Both elements of the plan are open to legal challenge, lawyers said. Imposing losses on customers who were not hacked appears to go against the company's terms of service, said Ryan Straus, a Fenwick & West lawyer
[/i]

This sort of is a very strong point. They can't just take funds from everyone and spread the 36% of losses like this. Have they commented yet on how the exchange was hacked or the 2 sigs were compromised ?

[polynesia]

Both elements of the plan are open to legal challenge, lawyers said. Imposing losses on customers who were not hacked appears to go against the company's terms of service, said Ryan Straus, a Fenwick & West lawyer
[/i]

This sort of is a very strong point. They can't just take funds from everyone and spread the 36% of losses like this. Have they commented yet on how the exchange was hacked or the 2 sigs were compromised ?

They say that this is what most resembles what will happen in a liquidation scenario.
Of course, this will be challenged in courts. Their aim should be to raise money quickly and liquidate these tokens.