Sat Aug 06 2016
Rachel Long (508 articles)

Hacked Bitcoin Exchange considers splitting $72 Million loss among users

Digital currency exchange Bitfinex says it’s leaning toward spreading $ 72 million loss from a hack earlier this week among users.

“We are still working out the details so nothing is set in stone, however we are leaning towards a socialized loss scenario among bitcoin balances and active loans to Bitcoin/U.S. Dollar positions,” the company wrote in a Friday blog post.

On Tuesday, the Hong Kong based exchange suspended trading after discovering the breach. Some users had their bitcoins stolen, totaling 119,756 bitcoins and 0.075% of all bitcoins in circulation.

“Some users who were not hacked will feel angry at having to stump up their funds to cover shortfalls elsewhere on the exchange. Whether it’s the right decision or not—time will tell,” Charles Hayter, CEO of CryptoCompare told CNBC. “Other exchanges have funded the losses off their own book—but then the losses weren’t so extreme.”

The losses also represent anywhere from 10% to 30% of Bitfinex’s capital holdings.

Over the past few days, the company has been going though the process of “restoring limited functionality” to the exchange and settling accounts based on an exchange rate of $ 604.06—the midpoint of the bid and ask on Aug. 2 at 6 p.m. UTC.

Bitfinex said it would give more details alongside an FAQ tomorrow to help answer the expected flood of questions it has been receiving.

Rachel Long

Rachel Long

Rachel Long is our Desk Correspondent covering Stock Markets across the globe. She is based in New York


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