I think Bitfinex is insured against bankruptcy. So their insurance company should be able to pay the bill however large it may be.
It might require a long process though.
Topic: Bitfinex legal obligations to users - page 2. (Read 2802 times)
way too early to tell but zane tackett's from bitfinex's wording is kinda slippery - "some of our users have had their bitcoins stolen" and they're trying to "account for individualized customer losses"
check this comment - https://www.reddit.com/r/btc/comments/4vtv67/bitfinex_security_breach/d62uzxn
at the moment it feels like their gist is that the loss is somehow the customer problem not theirs, but that's only my guess. he's emphasized repeatedly that only bitcoin has been taken and everything else is safe so maybe they intend to continue trading as if nothing happened?
i'm not sure this guy understands bankruptcy and liabilities himself.
check this comment - https://www.reddit.com/r/btc/comments/4vtv67/bitfinex_security_breach/d62uzxn
at the moment it feels like their gist is that the loss is somehow the customer problem not theirs, but that's only my guess. he's emphasized repeatedly that only bitcoin has been taken and everything else is safe so maybe they intend to continue trading as if nothing happened?
i'm not sure this guy understands bankruptcy and liabilities himself.
The ignorance of those guys is pretty scary. If they carry on with that logic and allow withdrawals, they can land themselves in jail.
...
Ideally, bitfinex is in a situation in which only a small percentage of customer funds is affected, so the semantics will not really matter.
Ideally, bitfinex is in a situation in which only a small percentage of customer funds is affected, so the semantics will not really matter.
Are you sure? $78m doesn't sound like small percentage to me.
way too early to tell but zane tackett's from bitfinex's wording is kinda slippery - "some of our users have had their bitcoins stolen" and they're trying to "account for individualized customer losses"
check this comment - https://www.reddit.com/r/btc/comments/4vtv67/bitfinex_security_breach/d62uzxn
at the moment it feels like their gist is that the loss is somehow the customer problem not theirs, but that's only my guess. he's emphasized repeatedly that only bitcoin has been taken and everything else is safe so maybe they intend to continue trading as if nothing happened?
i'm not sure this guy understands bankruptcy and liabilities himself.
check this comment - https://www.reddit.com/r/btc/comments/4vtv67/bitfinex_security_breach/d62uzxn
at the moment it feels like their gist is that the loss is somehow the customer problem not theirs, but that's only my guess. he's emphasized repeatedly that only bitcoin has been taken and everything else is safe so maybe they intend to continue trading as if nothing happened?
i'm not sure this guy understands bankruptcy and liabilities himself.
Bitfinex are based in Hong Kong. Liquidation of a company in HK is set out in the Companies (Winding Up and Miscellaneous Provisions) Ordnance.
Generally, if the company is unable to pay a debt of $10,000 or above.
The stolen/hacked btc is alleged to be worth in the region of $78M USD. If Bitfinex can show that they have enough by way of reserves to cover this amount, they would avoid Liquidation. If they have insurance against theft (and assuming the insurance covers hacking) then they would avoid Liquidation.
Ultimately, a creditor will have to make an application to the court, after following the correct procedures for Liquidation. In HK, I do not believe class actions are allowed by the Court. There has been much debate in HK about class actions and maybe this event will lead the judiciary to accepting a class action system. For now, that is not an option.
I hope this is not another Mt Gox situation, I truly hope that Bitfinex are somehow covered here but due to the large amounts taken, it is inevitable I believe that many BTC customers of Bitfinex will lose out.
I hope people will now agree that digital currency exchanges have to be regulated properly in order for trust to grow in the industry. If proper procedures were in place at Bitfinex, this simply would not have been possible. Why they had such a huge amount of BTC in hot wallets and not cold storage is no doubt a question that will be asked a million times.
Generally, if the company is unable to pay a debt of $10,000 or above.
The stolen/hacked btc is alleged to be worth in the region of $78M USD. If Bitfinex can show that they have enough by way of reserves to cover this amount, they would avoid Liquidation. If they have insurance against theft (and assuming the insurance covers hacking) then they would avoid Liquidation.
Ultimately, a creditor will have to make an application to the court, after following the correct procedures for Liquidation. In HK, I do not believe class actions are allowed by the Court. There has been much debate in HK about class actions and maybe this event will lead the judiciary to accepting a class action system. For now, that is not an option.
I hope this is not another Mt Gox situation, I truly hope that Bitfinex are somehow covered here but due to the large amounts taken, it is inevitable I believe that many BTC customers of Bitfinex will lose out.
I hope people will now agree that digital currency exchanges have to be regulated properly in order for trust to grow in the industry. If proper procedures were in place at Bitfinex, this simply would not have been possible. Why they had such a huge amount of BTC in hot wallets and not cold storage is no doubt a question that will be asked a million times.
I am not sure how much liquidation value their assets have that are not USD, or any crypto coin. Sure they have brand value, however that would probably turn into a liability if they did not make their customers substantially whole.
As for how each individual customer is treated, there are varying moral arguments as to how to handle customer losses. The fact that margin trading has been halted, and the price has moved substantially makes this an even more complex situation.
Ideally, bitfinex is in a situation in which only a small percentage of customer funds is affected, so the semantics will not really matter.
As for how each individual customer is treated, there are varying moral arguments as to how to handle customer losses. The fact that margin trading has been halted, and the price has moved substantially makes this an even more complex situation.
Ideally, bitfinex is in a situation in which only a small percentage of customer funds is affected, so the semantics will not really matter.
I'm looking for answers here by someone in the know about bankruptcy laws. Bitfinex has lost 120,000 BTC but not their ETH ETC and LTC USD etc. Let's assume they are insolvent which to me seems probable.
Does this mean they have to liquidate all their assets to cover their entire customers equally? So sell off all their alts and then spread the BTC or USD across their customers.
To not make this complex we should replace cryptocurrency with currency i.e look at exchanges in USD EUR and other assets where there is precedent.
This is paramount to trading in the markets right now. Appreciate any help.
Does this mean they have to liquidate all their assets to cover their entire customers equally? So sell off all their alts and then spread the BTC or USD across their customers.
To not make this complex we should replace cryptocurrency with currency i.e look at exchanges in USD EUR and other assets where there is precedent.
This is paramount to trading in the markets right now. Appreciate any help.
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