Apologies for the length of our reply , I started writing this as a reply to your specific concerns but then realised that this may be something that a number of users may be interested in hearing and so have expanded it a bit but at the same time have hopefully addressed your points, please see the below:-
Thanks for your message and your continued support
The attack on the 2nd August was devastating both financially and emotionally.
The BitFinex team are all strong supporters of the Bitcoin Ecosystem and are passionate about being able to provide the most innovative products, technology, security and customer support.
There was an obvious failing with our security system to enable a hack to happen in the first place and then an additional failing with regards to the amount stolen. We cannot give out any further information at this stage as there are ongoing investigations with 3rd party forensic investigators and also multiple law enforcement agencies.
In the 8 days whilst the platform was offline we rebuilt our servers, moved the location and ran a number of security checks in conjunction with the forensic investigators before being satisfied that it would be safe to resume the BitFinex platform. Even though we have no evidence or reason to believe that any of users’ personal information was stolen we also requested that all users change passwords and security settings. All withdrawals are being manually approved and we have switched back to a hot and cold wallet system which means that if there was another hack then BitFinex has sufficient funds to cover any loss from the hot wallet.
With regards to the aftermath of the hack then the “easy” thing to do would have been to figuratively hand the keys over to a big 4 accounting firm and leave them to sort things out. I am happy to say that this thought did not cross the mind of anyone at BitFinex and we collectively took on the responsibility to make good on users’ losses.
The decision to socialize losses across all users and all currencies was made after consulting legal advice as this would be the closest approximation of what would have happened had we filed for bankruptcy. This resulted in everyone taking a loss or haircut, but it is our intention to repay these losses and so we issued the BFX token with a face value of $1USD. The goal is for BitFinex to redeem each of those tokens at $1USD per piece at some stage in the future. We have made this token tradeable for users who do not believe that we will be able to do this to sell them and further recoup some of their losses, and for investors who do believe that we will be able to repay at face value to buy these at a lower rate (currently around $0.36) and receive the $1USD if/when the tokens are redeemed.
In order to redeem these tokens at $1USD we are exploring a few options – (1) the recovery of the stolen coins themselves (2) Outside investment in BitFinex for at least the amount of the funds lost and (3) operating a normal profitable trading platform with periodic reduction of the tokens. Options (1) and (2) would mean a relatively quick repayment of the BFX tokens, option (3) would take considerably longer.
With regards to our current solvency; BitFinex has committed considerable resources in to the “pool” that took the haircut to reduce the amount that our users would lose but at the same time we have retained an operating float to cover the next few month’s costs and expenses and also for legal costs if there are any legal claims against BitFinex (or iFinex that owns and operates the BitFinex platform). The first two days after the site resumption saw considerable funds leaving the platform, both in Crypto-currencies and USD but we are happy to say that funds have also recently started to come back in to the exchange. We have recently resumed margin funding and margin trading activities (for non-US based users) and are seeing good numbers on the site, the price of btc is relatively stable and we are again the largest USD exchange based on daily trading. We are currently working on enabling our US based users to have full functionality again and when this happens we expect our numbers to go even higher.
We are hoping that our efforts and commitment to repaying our users will keep any legal action against BitFinex to a minimum and also that anybody contemplating legal action will see that the outcome may well be that they would actually receive a lot less than we are offering due to the high costs of legal fees and that there would also be a considerable delay in receiving funds.
We firmly believe that so far BitFinex has made the best possible decisions and demonstrated considerable resilience and resourcefulness in getting to this position but we are not resting on any laurels or thinking that this is “job done”. It remains our goal to repay all users losses as quickly and as painlessly as possible. We will continue to press forward with these plans and communicate as effectively as possible
Ultimately it is your decision as to whether or not to continue to trade with BitFinex and trust us with your funds but we do hope that our recent actions will help to convince you of our sincerity and abilities here.
Kind regards,
Stephen Bitfinex Support Team support@bitfinex.com