Topic: [OFFICIAL]Bitfinex.com first Bitcoin P2P lending platform for leverage trading (Read 723861 times)

The following is a message to all Bitfinex customers who were affected by the hack on August 2, 2016.

You probably remember that, after the hack, Bitfinex implemented a 36.067% haircut for all users and distributed BFX tokens ("without release or waiver" [3]) to users in return. Each BFX token had a nominal face value of 1 USD but had a real value in the free market of less than 20 cents at the time of distribution [4]. That is, if Bitfinex deducted crypto and fiat currency worth a total of, say, 1000 USD from a customer's account, the customer was credited with 1000 BFX. At the then-market value of below 20 cents per BFX token, this effectively meant Bitfinex caused damages of more than 800 USD to the customer. Using Bitfinex's own Bitcoin exchange rate of 604.06 USD at the time, this corresponds to more than 1.32 BTC.

Fast forward to 2022: The hackers were caught, and 95k BTC were recovered. I firmly believe that customers like the one in the example above own at least their proportional share of these BTC (including the forks). While I promptly wrote to both Bitfinex and the DoJ in 2022 to register my claims, neither responded. Last week, I discovered - purely by chance - that the DoJ plans to transfer the entire recovered 95k BTC directly to Bitfinex, leaving users empty-handed [2] p.19. In particular, Bitfinex does not intend to compensate the users affected in 2016, because "iFinex believes that it is the sole victim with sustained financial losses from the hack" [1] p.4.

United States Attorney Matthew M. Graves' justification for this decision reveals several deeply troubling issues:
1. In a glaring contradiction, he states that "the government's position is that there are no victims of the offenses of conviction" [1] p.5 and therefore users have no right to restitution [1] p.5 Footnote 2. Yet simultaneously, the government requests that the seized cryptocurrencies be returned as in-kind restitution to Bitfinex [2] p.19, effectively blocking users from accessing their rightful property.
2. He bases this position partly on the fact that "Defendant Ilya Lichtenstein and Defendant Heather Rhiannon Morgan .. maintain that the only potential victim for CVRA or MVRA purposes, if any, is Bitfinex." [1] p.2. It's strange that the hackers' opinion is being considered in determining who legally qualifies as a victim.
3. His presentation of the BFX token situation is fundamentally misleading. He claims ".. customers holding BFX tokens then had the choice of .. (2) redeeming their BFX tokens for a cash payment from Bitfinex, at a rate of $1 per BFX token .." while omitting that this option only became available many months after the hack and BFX distribution [1] p.3,4. Even more egregiously, he states: "In short, according to iFinex, all customers on VICTIM VCE's platform immediately following the hack had the same options: sell their BFX tokens .. back to VICTIM VCE for cash" [1] p.4. This is demonstrably false. In the immediate aftermath of the hack, BFX tokens traded below 20 cents [4], and Bitfinex made no cash offer (the BFX token was created precisely because Bitfinex lacked funds to compensate for the theft). The United States Attorney attributes these statements to iFinex - either he fabricated this or Bitfinex provided false information.
4. His claim that "The government has attempted to locate those victims, including by requesting a list of all accountholders from VICTIM VCE, but such efforts have been unsuccessful" [1] p.6,7 is absurd. Bitfinex could easily have notified its former customers via email. While Bitfinex's reluctance to do so is unsurprising, it's troubling that the United States Attorney apparently made no effort to compel such notification. Despite my 2022 communications to both the DoJ and Bitfinex, I received no notification and only learned about the planned transfer by chance.

Also concerning is the current timeline: Bitfinex victims are required to "submit a statement by no later than November 12, 2024" [5], despite the announcement apparently only being made at the end of October. This extremely short deadline appears deliberately prohibitive, especially given that many affected users likely haven't even learned about this opportunity yet - a direct consequence of the aforementioned inadequate notification practices. Notably, [5] only mentions impact statements, while [1] had announced giving users an opportunity to advance potential claims for victim rights and/or restitution [1], p.1 and p.9.

It's crucial to note that the stolen BTC were never Bitfinex's property. According to Bitfinex's own Terms of Service at the time, "all bitcoins in your Multi-Signature Wallets belong to and are owned by you."

Given these circumstances, I have engaged legal counsel last week, and we are currently preparing legal action. If you were also affected by the 2016 Bitfinex hack, I encourage you to contact me via forum PM for coordinating our strategy and potential joint legal action.


References:
[1] https://docs.dbnews.com/u/Bitfinex-Victim-Rights-Notification.pdf
[2] https://www.tbstat.com/wp/uploads/2024/10/show_temp-1.pdf
[3] https://www.bitfinex.com/posts/129
[4] https://www.bitfinex.com/posts/494
[5] https://www.justice.gov/usao-dc/2016-bitfinex-hack

Thoughts on this?

-----BEGIN PGP SIGNED MESSAGE-----
Hash: SHA1
 
The agreement is made November 17th, 2016 between
 
Giancarlo Devasini (“GD”), CFO of iFinex Inc. with full power of
attorney on behalf of iFinex Inc. communicating through
[email protected] and with the PGP pub key fingerprint E7ED 6B5B
0172 2ECD 7F9D FCBC 6F19 A931 3DDF 4814
 
and
 
the entity owner (“BM”) of the email address
[email protected] and with the PGP
pub key fingerprint F136 8394 018A DFF7 0AF3 7550 C1DC A5C7 8321 5A72.
 
Whereas
 
iFinex Inc. was the victim a security breach on the 2nd of August 2016
that resulted in the theft of ~119,756 bitcoin and BM claims to know
the identity of the hacker, can provide evidence of that claim, and
can provide details on the attack vector(s) employed in the security
breach.
 
GD takes formal obligation on behalf of iFinex Inc. to move the amount
of 5,988 BTC under the direct control of Adam Back (PGP pub key
fingerprint 80 7B 4E FE D8 6F EF 86 81 E4 EA 27 78 E3 FA 1B with email
[email protected]) and Gregory Maxwell (PGP pub key fingerprint
0xAC859362B0413BFA with email [email protected]) who are trusted
persons by BM.
 
Adam Back and Gregory Maxwell, together with an additional trusted
third party (Daniel Folkinshteyn a/k/a nanotube) will hold these
bitcoin in escrow in a “2 of 3” multi-signature wallet with the public
key hash: 36XN5b82ZYVs5nCUBz3PE8LEhaCHEMkxmB
 
Once the bitcoin has been transferred into escrow, BM will then
provide to GD the identity of the hacker, the evidence linking the
hacker to the security breach, and details on the attack vector(s)
employed in the security breach.
 
A bounty of five percent (5%) on any recovered bitcoin will be paid by
iFinex Inc. from the multi-signature wallet in control of Adam Back,
Gregory Maxwell, and Daniel Folkinshteyn with the public key hash:
36XN5b82ZYVs5nCUBz3PE8LEhaCHEMkxmB within a month of the bitcoin
recovery to BM’s wallet with the public key hash of
1FW4G4W9s89rKiB3VU7PZcNBPPn2btFYzP. If no bitcoin is recovered, no
bounty is due to BM.
 
GD and iFinex Inc. have no right to claim any total or partial
withdrawal from this agreement under the assumption that the hacker
identity was previously known by GD or hinted at by anybody else. The
full amount of 5% of any recovered amount will be paid by iFinex
Inc. to BM.
 
GD and iFinex Inc. have no right to claim any total or partial
withdrawal from this agreement without adequately informing Adam Back
and Greg Maxwell why the individual revealed by BM is no longer a
person of interest or why the bitcoin may be irrecoverable.
 
Neither Adam Back nor Gregory Maxwell are liable to GD or iFinex
Inc. for any of their actions or inactions under this agreement.
 
This agreement is considered to be in effect when BM is in receipt of
PGP signed copies of this agreement from GD, Adam Back, and Gregory
Maxwell.
-----BEGIN PGP SIGNATURE-----
Version: GnuPG v1.4.11 (GNU/Linux)
 
iQEVAwUBWC4/BBQ8n0HY8FbdAQJaIgf+OC2qFsFIGsynS2apYxVAaAACr+HfOrhZ
sAMedySXB5b/7c06f8M5tDJGMLYxMeAaaUQdfUgSWd5dcl021KiOmdwzZx8lDeb7
KKg2/UJKntKoR2kZI+4M78M/Fx1VHrzZ1erKF4WoLUAFIBJduAUoKEtLnpoOFUpZ
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it's definitely general/global.

I just logged into my old unverified Bitfinex account and I can confirm that the trading Buy and sell) buttons are disabled as of today with a notification to verify the account.

As Potato Chips told above there don't seem to be any announce available, I just got few emails from them and the pop-up notification I posted above each time I logged on.
I don't know if it's a global stance, but today I confirm I can't trade anymore there 

I don't think there is.

When they made KYC mandatory last year, I remember looking for announcement blog/post and found nothing. They did update their help articles, see this for instance:


@/Saint-loup's snap is i guess for some existing users who were to be purged at a later date. My test account is showing the same notice actually. Upon checking, I could only find that pop-up notification.

Ann posts: nothing
Blog: nothing
My email: nothing - or perhaps emails are delayed or something.

Could you please post a link to this announcement?

Be careful guys, if you haven't made KYC now Bitfinex will display a message like that when you will login. So it seems in one month and 3 weeks, June 21 2023 accounts without KYC will no longer be able to trade on the exchange or to lend their funds and will only be able to withdraw them.  
That's sad because it was one of the very few exchanges (and the only one without KYC mandatory AFAIK) allowing deposits and withdrawals with Lightning Network.

Yes, I refreshed the chart, I also cleared browser cache and checked out that link. Still no chart. I tested it on my phone in a firefox browser (instead of the Bitfinex app I normally use), and I can see a chart there. It must be something with my desktop's connection. Not a huge problem though, I'll use my phone to see charts for now. Thanks for the help.

I logged in and it works fine on my end - firefox with ublock origin. Have you looked into this basic troubleshooting article of theirs? see: https://support.bitfinex.com/hc/en-us/articles/360023364834-FAQ-on-Chart-and-User-Interface-loading-problems

I'm guessing you've also tried the "clear and refresh chart settings" button?

This topic seems pretty dead, but in case someone is reading...

Since a while now, more than a month, I can't see charts anymore on the bitfinex website. In the app it works fine, but when I log into the website, the area where the chart should be is just blank, doesn't matter if I'm in trading, derivatives or lending, it's just a blank area where the chart used to be.

I'm using the latest firefox. I also tried logging in on a completely new firefox profile without any addons etc, still no charts.

Is there anyone else with this problem? Or better yet, is there a solution?

Ok, i don't know if is a problem of my browser, but if i copy the tx id on the explorer of solana i can't see nothing, if i use your complete link, the tx is visible....

For what i can see in the explorer effectively the transaction is confirmed and ok....

Why bitfinex keep all that time to process and thay say that is a long process too, is a myster, searched some more, and i can see that usdt is supported on solana by more than one year, so your problem is strange, exchanges have to manage this situation in small time.

Umbelievable.....

The only thing i can try to suggest, is to don't flood support with new requests/tikets often, because most of support teams on the crypto world, if they receive another ticket for the same request they send you back at the end of the queue. i know of more than one site that do this thing. i don't know if bitfinex do the same.....

Whats about this?

https://explorer.solana.com/tx/25tCyeMp7Tgof919LRJYs4kkuEsjVXEJK6bhB8BSUAX3ZAeSQ9NkUATp2vff3reNhD4oDFo6xcsu1R9B4CnK6fiS

Just tried some research based on your info, but seems that someting IS unusual....

searched your tx id on this explorer that say it will search all three chains where usdt can be transferd :https://stablecoin.tokenview.com/en/usdt and no result.

readed this article : https://ccfox.zendesk.com/hc/en-us/articles/900000957406-Difference-in-Three-USDT-Chain-OMNI-ERC20-and-TRC20 and this give the three format of address that is used on the 3 networks to transfer usdt, and you address is not on any of the formats present on this article.


Searched also the tx id on solana explorer, and nothing else also there (in case you where sending SOL as you cite them in you statement.

So without any other info, seems hard to find where you send, what coin and what network you used.

What is here non-standard or unusual? I've sent the USDT (SOL) to my deposit address on bitfinex.

Here is the Wallet and the Transaction ID:


Adress sent to: ufGk5ukyJ3T39ETpXfxSy3YxE5yY4LWqhUbRuZhL5QP
Transaction ID: 25tCyeMp7Tgof919LRJYs4kkuEsjVXEJK6bhB8BSUAX3ZAeSQ9NkUATp2vff3reNhD4oDFo6xcsu1R9 B4CnK6fiS

Was your transaction non-standard or unusual in any way? Are you comfortable sharing the txid and blockchain the deposit was sent to?

I don't think bitfinex is very active on bitcointalk, but you can try posting on twitter and you might get their support's attention.

Made a deposit of almost 7k USDT (SOL) on Bitfinex on 24. Oct 2021 - till today, the 06. November they did not credit the amount.

Adress sent to: ufGk5ukyJ3T39ETpXfxSy3YxE5yY4LWqhUbRuZhL5QP
Transaction ID: 25tCyeMp7Tgof919LRJYs4kkuEsjVXEJK6bhB8BSUAX3ZAeSQ9NkUATp2vff3reNhD4oDFo6xcsu1R9 B4CnK6fiS

Support answers all the time the same, I have to wait... But now they started to close my ticket without responding to me and resolving it.

Who could help? What should I do? Or can I forget my money?


https://ibb.co/w7FRLsN

Datapoint about my friend's experience with Bitfinex recently:

 - A number of reasonably large USD transfers have gone through without incident over the last half year.  I would specify that it is without incident from Bitfinex's side...the banks themselves are chronic sources of grief and delay.

 - A recent incident with a new bank saw a wire be 'returned' by the bank to the sender, whatever that means.  The funds went missing.  After some legal threats to the bank, my friend got the tracking info.  Only then did friend bother Bitfinex support.  Upon doing so, they were very efficient and informative in tracking down the funds and getting them back to the appropriate wallet.

I've talked smack about Bitfinex over the years even though I've never been a customer.  I think it important to also relay positive information when the vendor does provide exemplary service so that is what I am doing.  As always, YMMV, but this is my friend's recent experience.

There could be PR reasons, too, putting some of their current or potential users at ease. They could go further and find someone trustworthy who could corroborate their claims.

As you already stated it could be to do with NYAG. There must have been some reason that is was done now rather than before or waiting until November.


They are affiliated companies so it's effectively an internal loan and they are paying interest to themselves. I would think it highly likely they were not able to do something to earn more than 0% in it. This looks more of a matter of internal accounting than any great mystery.

The loan was not due until November of this year.

Most loans accrue interest periodically, and if a company cannot produce returns (adjusted for risk) from investing the money that could be used to repay a loan that is greater than the interest rate, the company is incurring interest expenses for no reason. I am not familiar with bitfinex's intimate financial details, however, I would find it hard to believe that bitfinex is able to invest $550 million for 6 months, and reliably earn a risk-adjusted return greater than the interest rate they were paying.

The only thing I could possibly see them using that kind of money on is capital for their OTC trading desk, but I am not sure it would generate that much revenue.