[OFFICIAL]Bitfinex.com first Bitcoin P2P lending platform for leverage trading

[blueberry]

Whats the status on this? I woke up this morning to see I lost 4 btc worth of ltc.. not very pleased to say the least. Trades being rolled back or what?

Yes, trading was frozen about 6 hours ago and trades executed last night during a period of exploitation and abnormal trading activity are currently being rolled back. An annoucement was made by Bitfinex. Maybe your trades haven't been rolled back yet. Hopefully this issue will be resolved today.

Dear Customers

the situation is under control.
No money or coins are missing and the problem was due to some malicious trader trying to play with the LTC ticker price in order to take advantage on us.
We are now reversing all transactions that took place on our platform during the time when all got messy (approx 7 a.m. GMT).

Very few transactions (for a total of 2,000 btc) actually took place on Bitstamp, only limited to the BTC/USD pair (Bitstamp doesn't trade LTC) and they actually took place at a price that was around 750 usd, so no big deal.
We enabled the trading engine for a few minutes and then switched it off again to avoid those rats (sorry I cannot think of a better word in this moment) to shuffle things even more and to make our work more difficult.
We keep an eye on the price and we can always enable it in the next minutes whilst we reverse trades that took advantage of the abnormality should the price get volatile.

The whole operation will not take anyway more than one hour.

Thanks a lot for your understanding and we deeply apologize for the inconvenience

Giancarlo
Bitfinex Team  

[1714716198]

1714716198

[1714716198]

1714716198

[mlocks01]

I am completely speechless. Binfinex has STOLEN over $5,500 in USD and 240 LTC from my account. I was short leading up to the incident last night and able to close my position well before the wild swings began. This is the kind of dip that many of us have been waiting for and Bitfinex decides to arbitrarily cancel all trades?  The hacker story makes a nice excuse, but there was a legitimate sell off that got exacerbated by margin calls. That's why I here to begin with, to use the leverage. I've been a loyal user on this exchange and there was no refund for me when I was long 1,500 LTC before things got ugly back in December. Why should it be acceptable for me to fund those losses when the Bitfinex LTC exchange printed a .0001 back then? That was Bitfinex's mistake just as much as allowing someone to hack the website, if that is indeed what happened.  I will be closing my account and taking any and all legal actions available. I suspect there is more to the story and I intend to find out what it is. Ultimately, it's this type of thievery and abuse that will prevent this exchange from being viable in the future, and it is an example of why crypto in general is suspect. In not honoring the legitimate trades and standing by it's users Bitfinex has lost all credibility and in my opinion is no better than the hackers.

[urwhatuknow]

Whats the status on this? I woke up this morning to see I lost 4 btc worth of ltc.. not very pleased to say the least. Trades being rolled back or what?

please pm me your username as I will then be able to see your position.

Thanks

Giancarlo
Bitfinex Team

[urwhatuknow]

I am completely speechless. Binfinex has STOLEN over $5,500 in USD and 240 LTC from my account. I was short leading up to the incident last night and able to close my position well before the wild swings began. This is the kind of dip that many of us have been waiting for and Bitfinex decides to arbitrarily cancel all trades?  The hacker story makes a nice excuse, but there was a legitimate sell off that got exacerbated by margin calls. That's why I here to begin with, to use the leverage. I've been a loyal user on this exchange and there was no refund for me when I was long 1,500 LTC before things got ugly back in December. Why should it be acceptable for me to fund those losses when the Bitfinex LTC exchange printed a .0001 back then? That was Bitfinex's mistake just as much as allowing someone to hack the website, if that is indeed what happened.  I will be closing my account and taking any and all legal actions available. I suspect there is more to the story and I intend to find out what it is. Ultimately, it's this type of thievery and abuse that will prevent this exchange from being viable in the future, and it is an example of why crypto in general is suspect. In not honoring the legitimate trades and standing by it's users Bitfinex has lost all credibility and in my opinion is no better than the hackers.

so many newbies spitting nice words, most of them at their first message.....
after I ask for their username they all disappear like snow in the sun....
can you please PM your username to me so that I can check your position?

Thanks

Giancarlo
Bitfinex Team

[CambioBTC]

Frightening. This is truly scary.

REDDIT TITLE:
How I stole roughly 100 BTC from an exchange and how I could have stolen more!

http://www.reddit.com/r/Bitcoin/comments/1wtbiu/how_i_stole_roughly_100_btc_from_an_exchange_and/

Question,

Is BitFinex's Platform A.C.I.D. Proof ?

Basically financial software often deals with online transaction processing, which is basically what traditional, SQL-based database management systems are made for, they guarantee ACID:

    Atomicity (processed as a whole, e.g. if transaction moves money from account A to B you cannot get to a situation when only one balance is updated)
    Isolation (concurrent transaction do not interfere with each other)
    Consistency (data always satisfies constraints)
    Durability (data is stored permanently after transaction is committed)

In computer science, ACID (Atomicity, Consistency, Isolation, Durability) is a set of properties that guarantee that database transactions are processed reliably. In the context of databases, a single logical operation on the data is called a transaction. For example, a transfer of funds from one bank account to another, even involving multiple changes such as debiting one account and crediting another, is a single transaction.

    Jim Gray defined these properties of a reliable transaction system in the late 1970s and developed technologies to achieve them automatically.

    In 1983, Andreas Reuter and Theo Härder coined the acronym ACID to describe them.


SOLUTION:

OP managed to trick the exchange's database into forgetting he withdrew 100 BTC by simultaneously selling off several 0.0001 BTC units and getting one of the small transactions to clash and overwrite the large withdrawal.

So both operations read his balance of X BTC at the same time subtracted 100 BTC and 0.0001 BTC respectively. The first operation wrote back the balance of x - 100 into the database and the second operation then overwrote that balance with x - 0.0001, effectively giving OP back those 100 BTC.

One of the most basic things you need to take into account when implementing a database is record locking, to make sure only one operation can access a specific bit of data at one time and that any operation must relinquish control before another operation is allowed access, to make sure such clashes don't occur and corrupt the data.

Appears that this question was asked days ago before the problem occurred,
but got no response, would seem that a little more attention to details / customers questions
could avoid a lot of problems.

[MAbtc]

Giancarlo,

What is the status of trades being rolled back? Is this complete? Where are we in this process? What is the ETA? When will Bitfinex release details of what happened, and how will they assure us that this will not happen again?

[8fold]

Giancarlo,

What is the status of trades being rolled back? Is this complete? Where are we in this process? What is the ETA? When will Bitfinex release details of what happened, and how will they assure us that this will not happen again?

Fair questions. I second that. Thank you!

[CambioBTC]

so many newbies spitting nice words, most of them at their first message.....
after I ask for their username they all disappear like snow in the sun....
can you please PM your username to me so that I can check your position?

Thanks

Giancarlo
Bitfinex Team

Hey Chief (Giancarlo),

You can check my position on my last trade,
I held that trade open for like 19-Hours because
my P/L kept reading like $50+ dollars when I knew
that I was only like one point short from where I entered,
so I did not exit until the P/L appeared someone correct,
but still not right, meanwhile the Swap Interest shot up to like
$23 or $26 dollars on a 15 btc position, even when I exited the
P/L did not appear to be functioning correctly, I would be more
than happy with setting my balance back to whee it was before
the trade, something you might want to look into, and my handle
is my username, no need to pm.
was this a bug in the system ?, a credit would be great.

This was after I had cleared the fees point.

[blueberry]

Frightening. This is truly scary.

REDDIT TITLE:
How I stole roughly 100 BTC from an exchange and how I could have stolen more!

http://www.reddit.com/r/Bitcoin/comments/1wtbiu/how_i_stole_roughly_100_btc_from_an_exchange_and/

Question,

Is BitFinex's Platform A.C.I.D. Proof ?

Basically financial software often deals with online transaction processing, which is basically what traditional, SQL-based database management systems are made for, they guarantee ACID:

    Atomicity (processed as a whole, e.g. if transaction moves money from account A to B you cannot get to a situation when only one balance is updated)
    Isolation (concurrent transaction do not interfere with each other)
    Consistency (data always satisfies constraints)
    Durability (data is stored permanently after transaction is committed)

In computer science, ACID (Atomicity, Consistency, Isolation, Durability) is a set of properties that guarantee that database transactions are processed reliably. In the context of databases, a single logical operation on the data is called a transaction. For example, a transfer of funds from one bank account to another, even involving multiple changes such as debiting one account and crediting another, is a single transaction.

    Jim Gray defined these properties of a reliable transaction system in the late 1970s and developed technologies to achieve them automatically.

    In 1983, Andreas Reuter and Theo Härder coined the acronym ACID to describe them.


SOLUTION:

OP managed to trick the exchange's database into forgetting he withdrew 100 BTC by simultaneously selling off several 0.0001 BTC units and getting one of the small transactions to clash and overwrite the large withdrawal.

So both operations read his balance of X BTC at the same time subtracted 100 BTC and 0.0001 BTC respectively. The first operation wrote back the balance of x - 100 into the database and the second operation then overwrote that balance with x - 0.0001, effectively giving OP back those 100 BTC.

One of the most basic things you need to take into account when implementing a database is record locking, to make sure only one operation can access a specific bit of data at one time and that any operation must relinquish control before another operation is allowed access, to make sure such clashes don't occur and corrupt the data.

Appears that this question was asked days ago before the problem occurred,
but got no response, would seem that a little more attention to details / customers questions
could avoid a lot of problems.

Interesting. But to be fair, the poster at reddit doesn't mention Bitfinex specifically, so there is the chance that it was another exchange that was exploited. It could even be Gox that was exploited! (maybe that would explain why they are not allowing BTC withdrawals! They are upgrading their security so it doesn't happen again!  )

But I think Bitfinex's issue was different, it seems actually trading and borrowing was required for the exploiters to make money. Also try withdrawing 100 BTC from Bitfinex and you'll have to wait for it to be processed manually. While a 100 BTC withdrawal from Gox would likely be automatic (before they stopped BTC withdrawals).

Maybe Giancarlo can clarify whether it was Bitfinex that was contacted about this issue, if not it was probably Gox.

[urwhatuknow]

UPDATE

Just to clear up things, it's better to repeat what has already been stated earlier today:

1) No coins were stolen.
2) No money was moved.
3) Our servers are safe.
4) Nobody broke into our system.
5) We use cold wallets and only a very tiny portion of our total is kept in the hot wallet.
6) The malicious trader was only able to by some coins on margin but his positions were then reversed
7) All the trades that took place before 3 a.m. GMT today were neither effected nor reversed.

We resumed trading 3 hours ago and now all is working fine, the glitch has been corrected and apart for some people that tried to take advantage of the abnormal situation the very vast majority of our customers behaved brilliantly.

Let me once more reiterate that I believe Bitfinex is a community and its people should behave accordingly and not try to take advantage on each others when things are clearly showing dysfunctional numbers.
Few people understand that if they are able to buy a coin for half price is the other part of the trade and not Bitfinex that loses something.

We will always protect customers getting exploited in their leveraged positions by market manipulators.

We surely had better days, but we emerge from this difficult event with the consciousness of having made the right thing.

Have a good day you all and thanks a lot for your support

Giancarlo
Bitfinex Team

 

[investr]

What is the status on withdrawals? Mine has gone from pending approval, to processing, back to pending approval the last few hours.

[urwhatuknow]

Frightening. This is truly scary.

REDDIT TITLE:
How I stole roughly 100 BTC from an exchange and how I could have stolen more!

http://www.reddit.com/r/Bitcoin/comments/1wtbiu/how_i_stole_roughly_100_btc_from_an_exchange_and/

Question,

Is BitFinex's Platform A.C.I.D. Proof ?

Basically financial software often deals with online transaction processing, which is basically what traditional, SQL-based database management systems are made for, they guarantee ACID:

    Atomicity (processed as a whole, e.g. if transaction moves money from account A to B you cannot get to a situation when only one balance is updated)
    Isolation (concurrent transaction do not interfere with each other)
    Consistency (data always satisfies constraints)
    Durability (data is stored permanently after transaction is committed)

In computer science, ACID (Atomicity, Consistency, Isolation, Durability) is a set of properties that guarantee that database transactions are processed reliably. In the context of databases, a single logical operation on the data is called a transaction. For example, a transfer of funds from one bank account to another, even involving multiple changes such as debiting one account and crediting another, is a single transaction.

    Jim Gray defined these properties of a reliable transaction system in the late 1970s and developed technologies to achieve them automatically.

    In 1983, Andreas Reuter and Theo Härder coined the acronym ACID to describe them.


SOLUTION:

OP managed to trick the exchange's database into forgetting he withdrew 100 BTC by simultaneously selling off several 0.0001 BTC units and getting one of the small transactions to clash and overwrite the large withdrawal.

So both operations read his balance of X BTC at the same time subtracted 100 BTC and 0.0001 BTC respectively. The first operation wrote back the balance of x - 100 into the database and the second operation then overwrote that balance with x - 0.0001, effectively giving OP back those 100 BTC.

One of the most basic things you need to take into account when implementing a database is record locking, to make sure only one operation can access a specific bit of data at one time and that any operation must relinquish control before another operation is allowed access, to make sure such clashes don't occur and corrupt the data.

Appears that this question was asked days ago before the problem occurred,
but got no response, would seem that a little more attention to details / customers questions
could avoid a lot of problems.

Interesting. But to be fair, the poster at reddit doesn't mention Bitfinex specifically, so there is the chance that it was another exchange that was exploited. It could even be Gox that was exploited! (maybe that would explain why they are not allowing BTC withdrawals! They are upgrading their security so it doesn't happen again!  )

But I think Bitfinex's issue was different, it seems actually trading and borrowing was required for the exploiters to make money. Also try withdrawing 100 BTC from Bitfinex and you'll have to wait for it to be processed manually. While a 100 BTC withdrawal from Gox would likely be automatic (before they stopped BTC withdrawals).

Maybe Giancarlo can clarify whether it was Bitfinex that was contacted about this issue, if not it was probably Gox.

as far as I know nobody contacted us with this email, so it must be somebody else.....

thanks

Giancarlo
Bitfinex Team

[urwhatuknow]

What is the status on withdrawals? Mine has gone from pending approval, to processing, back to pending approval the last few hours.

withdrawals are being made, but it takes time as we are replenishing the hot wallet.

Thanks and have a good day

Giancarlo
Bitfinex Team

[Ente]

Question: If you get a margin call on your trading wallet, but you have funds in your exchange wallet, will funds get pulled from your exchange wallet into your trading wallet, or will you get liquidated?

I ask because during slow markets, I primarily trade using exchange wallet rather than trading wallet, so that I don't get charged lending fees. But I still have a bunch of leveraged orders on my trading wallet at incremental low prices in case of flashcrashes and I really don't want to bother having to cancel them all whenever I want to trade on exchange and re-place them whenever I'm done trading on exchange. However, today with that bug two of my outermost flashcrash orders got hit while I had nearly no funds in my trading wallet and it was really a wakeup call. I had 0.8btc in my trading account and I bought 5 btc at 690.1 and 5btc at 680.1. lol. Luckily the price didn't go any further.

In the case that the wallet would be liquidated, I will have to adjust my strategy so that I primarily do trading on the trading wallet and in times when I want to be "in fiat" I will hold a balance of bitcoins but "short" the balance and have an open short position with an equal amount of bitcoins.

This wasn't answered yet I think.
No, stuff from different wallets are completely independent from each other.
Funds in your exchange wallet do not count as "security", don't lower your liquidation price in margin trading, and don't get liquidated if your funds in your trading wallet get liquidated from a bad position.

Also, you can't lend out funds to receive interest and additionaly have those funds as "security" for margin trading. Independent wallets and independent tools.

Ente

[urwhatuknow]

so many newbies spitting nice words, most of them at their first message.....
after I ask for their username they all disappear like snow in the sun....
can you please PM your username to me so that I can check your position?

Thanks

Giancarlo
Bitfinex Team

Hey Chief (Giancarlo),

You can check my position on my last trade,
I held that trade open for like 19-Hours because
my P/L kept reading like $50+ dollars when I knew
that I was only like one point short from where I entered,
so I did not exit until the P/L appeared someone correct,
but still not right, meanwhile the Swap Interest shot up to like
$23 or $26 dollars on a 15 btc position, even when I exited the
P/L did not appear to be functioning correctly, I would be more
than happy with setting my balance back to whee it was before
the trade, something you might want to look into, and my handle
is my username, no need to pm.
was this a bug in the system ?, a credit would be great.

This was after I had cleared the fees point.

nothing happened to the Swap, apart for the fact that it went up a little bit due to some borrowing.
You basically closed a position where you had a profit of 23 dollars that was offset by a swap of 26 usd, landing you on a loss of 3 usd.
So what's your proposal here?
Shall we reimburse a quarter and call it a deal?

Sorry for being a little sarcastic, maybe I just had a bad day.
Or maybe it's just me.....

Have a good day

Giancarlo
Bitfinex Team

[Ente]

Giancarlo, thank you for the updates, and the good work you and the team did and do!

Also, you managed those whiners and wannabe-freeriders well! After reading post after post, page after page, I really had to bite my tongue.. ;-)

After all that was said I am curious what actually happened!

Ente

[investr]

What is the status on withdrawals? Mine has gone from pending approval, to processing, back to pending approval the last few hours.

withdrawals are being made, but it takes time as we are replenishing the hot wallet.

Thanks and have a good day

Giancarlo
Bitfinex Team

Thanks for the quick reply and good job recovering from the malicious traders.

[blueberry]

Interesting. But to be fair, the poster at reddit doesn't mention Bitfinex specifically, so there is the chance that it was another exchange that was exploited. It could even be Gox that was exploited! (maybe that would explain why they are not allowing BTC withdrawals! They are upgrading their security so it doesn't happen again!  )

But I think Bitfinex's issue was different, it seems actually trading and borrowing was required for the exploiters to make money. Also try withdrawing 100 BTC from Bitfinex and you'll have to wait for it to be processed manually. While a 100 BTC withdrawal from Gox would likely be automatic (before they stopped BTC withdrawals).

Maybe Giancarlo can clarify whether it was Bitfinex that was contacted about this issue, if not it was probably Gox.

as far as I know nobody contacted us with this email, so it must be somebody else.....

thanks

Giancarlo
Bitfinex Team

So it was most likely Gox then. Thanks for the info!

[digitalfan]

Hello Giancarlo and Raphael,

I was trading as usual last night when I noticed strange things happening with Bitfinex, everything got messed up, e.g. I bought 100 LTC two times and the commission was 7.5 BTC for both trades! It completely wiped out my trading account and put it into a negative zone (please see the screenshot attached). After reading the discussion on [Suspicious link removed] I realized that something was seriously broken. Therefore, please take a look into my account and restore to the previous state. I can see now that you have removed any positions I had in margin trading (they highly were profitable) and removed the negative balance on my trading account which is fine as I understand that the system simply broke and all trades are invalid. So my trading wallet balance is now $0 and 0 BTC. Before the Bitfinex malfunction it was $50 and 2.5054837 BTC (as you can see in the history as of late Feb. 5 -- I'm located in the US Eastern Time zone). Please take a look into this.

Best regards,
digitalfan

CC: Bitfinex support email.

http://www.image-share.com/upload/2427/249.png

[nicolaennio]

Well done guys!