Possible $100 Million in Bitcoins Stolen From Online Exchange Bitfinex

Archived From: Finance
  • Page :
  • 1
  • Text Only
Voting History
rated:
Link: https://www.cryptocoinsnews.com/bitcoins-price-plummets-125k-bit...

I have about 7.5 bitcoins at Coinbase and have watched my coins drop in value since the news came out. Ethereum is dropping in sympathy.

It may be another Mt. Gox. Bitfinex has shut down trading. If they have no way of handling potential huge losses, their customers may be screwed.

This is just developing, so details could change.

Member Summary
Most Recent Posts
I'm pondering a new currency: bytebills. The plan is to have mining operations are on the moon, where there are more re... (more)

dazviking (Aug. 08, 2016 @ 9:40p) |

Trading is open again on the platform. All users (except a few who who had only US in segregated accounts through Synaps... (more)

weezyrob (Aug. 10, 2016 @ 12:38p) |

Those BFX tokens are worth $0... anyone on the buying end of that transaction is a moron.

brettdoyle (Aug. 11, 2016 @ 1:12a) |

Staff Summary
Thanks for visiting FatWallet.com. Join for free to remove this ad.

how does one own half a bitcoin

rufflesinc said:   how does one own half a bitcoin

They're divided into smaller decimal units:

A Satoshi is the smallest fraction of a Bitcoin that can currently be sent: 0.00000001 BTC, that is, a hundredth of a millionth BTC. In the future, however, the protocol may be updated to allow further subdivisions, should they be needed.

Some of the other coins are dropping as BTC goes down. I picked up some ether for about 2 bucks less than what it was pre-hack.

Can't we just keep one thread with these Bitcoin exchange "hacks"? There is one every few months and there will be as long as people think it is safe to keep their bitcoins in some random guy's server...

rufflesinc said:   how does one own half a bitcoin
How does one own half a dollar?

jayK said:   
rufflesinc said:   how does one own half a bitcoin
How does one own half a dollar?

  Wrong question, you should be asking, how does one own half a cent?



click for a pyramid
Disclaimer
That's a pretty funny ad they've got there....

 

rufflesinc said:   
jayK said:   
rufflesinc said:   how does one own half a bitcoin
How does one own half a dollar?

  Wrong question, you should be asking, how does one own half a cent?

I think a better analogy that may be familiar, is how does one own half a share of stock? Mostly, it's bookkeeping.

SlimTim said:   
rufflesinc said:   
jayK said:   
rufflesinc said:   how does one own half a bitcoin
How does one own half a dollar?

  Wrong question, you should be asking, how does one own half a cent?

I think a better analogy that may be familiar, is how does one own half a share of stock? Mostly, it's bookkeeping.

  So how does one own half a share berkshire A?

So nothing of value has been lost.

SummerSoFar said:   So nothing of value has been lost.
Many trilbies have been thrown at basement walls in frustration.

Don't worry, I heard this currency is far superior to any fiat currency, so I'm sure it was insured by some super-FDIC or something and everyone will be made whole. Right? Right?? Hello?


Legal Tender?
Disclaimer
rufflesinc said:   
jayK said:   
rufflesinc said:   how does one own half a bitcoin
How does one own half a dollar?

  Wrong question, you should be asking, how does one own half a cent?

  By buying a half cent coin maybe?

1/2 Cent

In hackers we trust, versus the fiat currency run by the guys with guns and attitude who will tap dance on the skull and anyone that fakes it?

"I stole this fair and square..."

zanetackett said: 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 BTCUSD positions.

https://www.reddit.com/r/Bitcoin/comments/4w7ny6/bitfinex_update...

weezyrob said:   zanetackett said: 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 BTCUSD positions.

https://www.reddit.com/r/Bitcoin/comments/4w7ny6/bitfinex_update...


What exactly is a socialize loss? Everyone contributing a proportional amount to the theft?

I can't see how the company can survive that. Every customer will decide to leave, not to mention lawsuits.

weezyrob said:   zanetackett said: 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 BTCUSD positions.

https://www.reddit.com/r/Bitcoin/comments/4w7ny6/bitfinex_update...


What exactly is a socialize loss? Everyone contributing a proportional amount to the theft?

I can't see how the company can survive that. Every customer will decide to leave, not to mention lawsuits.

Why don't you print out these bitcoins on convenient dollar bill sized pieces of paper and don't store them electronically?

What a mess.  Sounds like ~2/3 of their BTC might have been stolen, so that's a big haircut for everyone to take.  Socialized losses would mean everyone loses 2/3 (or whatever the number is) instead of each person losing or not based on how many of their actual BTC were subject to the theft.  I am not entirely familiar with this exchange, didn't use them, but it sounds like they were facilitating trading in several of these currencies, margin loans, short positions, lending, etc.  Trade settlement and shorts and currencies exchanges can turn into a big mess when half of what was being traded turned out to be fake, lots of propagating problems.  Everyone who wasn't harmed is going to sue them if they try to take their money to pay for the losses.

xerty said:   What a mess.  Sounds like ~2/3 of their BTC might have been stolen, so that's a big haircut for everyone to take.  Socialized losses would mean everyone loses 2/3 (or whatever the number is) instead of each person losing or not based on how many of their actual BTC were subject to the theft.  I am not entirely familiar with this exchange, didn't use them, but it sounds like they were facilitating trading in several of these currencies, margin loans, short positions, lending, etc.  Trade settlement and shorts and currencies exchanges can turn into a big mess when half of what was being traded turned out to be fake, lots of propagating problems.  Everyone who wasn't harmed is going to sue them if they try to take their money to pay for the losses.

Margin loans could be a killer, depending how they were made and where the price of bitcoin went.

I don't know the laws in Hong Kong, but I don't think it will be nice to them.

If accounts weren't robbed proportionally, a customer who's account wasn't looted won't be happy about taking a haircut for those that were.

It sure looks like the company does not have money or insurance to cover the losses. This won't be pretty. The only outcome I can see is them closing up and declaring bankruptcy, with a legal battle thereafter.

Fortunately, I've never heard of this company until this. Not a cent of mine in there.

They don't exactly have FDIC so "socialized" is about the only thing they CAN do. Either FCFS until insolvency, or redeem proportionally until insolvency. Lawsuits are meaningless to an insolvent company.

I suspect when they catch up to the thieves someone is going to get it in the neck though.

RedWolfe01 said:   They don't exactly have FDIC so "socialized" is about the only thing they CAN do. Either FCFS until insolvency, or redeem proportionally until insolvency. Lawsuits are meaningless to an insolvent company.

I suspect when they catch up to the thieves someone is going to get it in the neck though.

  Time will tell.  If they get some good lawyers, they'll search for personal assets of the owners, any personal liability insurance they have, and so on.  It seems bitcoin hacking has become a way where crime does pay.  They may see in the blockchain the transactions for the stolen bitcoins, but no way to get it back or directly trace it somebody.  One used to need to go into a bank and rob it (very risky), but now you just need a laptop and an internet connection anywhere in the world to take thousands of times more money than you can possibly carry off robbing a bank.

weezyrob said:   
zanetackett said: 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 BTCUSD positions.

https://www.reddit.com/r/Bitcoin/comments/4w7ny6/bitfinex_update_regarding_margin_funding/

They've managed to privatize the profits while socializing the losses.

RedWolfe01 said:   They don't exactly have FDIC so "socialized" is about the only thing they CAN do. Either FCFS until insolvency, or redeem proportionally until insolvency. Lawsuits are meaningless to an insolvent company.

I suspect when they catch up to the thieves someone is going to get it in the neck though.

  Well fortunately it's all anonymous and stuff, so no thief is going to get it. After all that's the whole point of the anonymity feature, right?


I've been reading their blog: http://blog.bitfinex.com/uncategorized/update/

A lot of back and forth among customers, but Bitfinex is silent.

This company is toast.

AlwaysWrite said:   Don't worry, I heard this currency is far superior to any fiat currency, so I'm sure it was insured by some super-FDIC or something and everyone will be made whole. Right? Right?? Hello?
  
Just like with existing currencies, if you keep your bitcoin in an insured bank or exchange, then yes, there is a "FDIC or something" that will make you whole. For example, Coinbase has insurance for these types of events. It seems Bitfinex did not. Also, you can keep your Bitcoin in your own wallet on your own computer. You can even store your Bitcoins offline.

I do not own Bitcoins, never did, but am intrigued by the whole phenomenon.

They want everyone to accept a 36% haircut in their accounts. Not exactly a way to keep your customers or stay in business:

"Upon logging into the platform, customers will see that they have experienced a generalized loss percentage of 36.067%. In a later announcement we will explain in full detail the methodology used to compute these losses."

kamalktk said:   
RedWolfe01 said:   They don't exactly have FDIC so "socialized" is about the only thing they CAN do. Either FCFS until insolvency, or redeem proportionally until insolvency. Lawsuits are meaningless to an insolvent company.

I suspect when they catch up to the thieves someone is going to get it in the neck though.

  Well fortunately it's all anonymous and stuff, so no thief is going to get it. After all that's the whole point of the anonymity feature, right?


  
I suspect its not THAT anonymous -- the players know each other and the one that has a new pool not long after someone buys an "anonymous" pool ends up floating face down in it. 

Forever is a looong time to get away with something.  Especially if multiple people were involved and in this case they almost had to be.

Don't worry, Bitfinex has partnered with BitGo to provide 100% insurance for Bitcoin theft.

Oh wait, BitGo immediately denied all coverage.

This "economy" is a joke.

I'm pondering a new currency: bytebills. The plan is to have mining operations are on the moon, where there are more resources. Since it is so far away, bytebills will be harder to steal.

Trading is open again on the platform. All users (except a few who who had only US in segregated accounts through SynapsePay) were issued digital "BFX tokens" representing the 36% haircut. Terms for BFX token: https://www.reddit.com/r/BitcoinMarkets/comments/4x1fc9/bitfinex_has_posted_terms_for_the_bfx_token/
Trading went live about 1.5 hrs ago and already 2.4 million BFX tokens have been sold for $USD between $0.20 and $0.31 per token ("face" value of $1).
https://api.bitfinex.com/v1/pubticker/bfxusd
Additional 620K tokens have been sold for BTC
https://api.bitfinex.com/v1/pubticker/bfxbtc

Edit: now 3.3 million tokens sold, last price $0.4007

Those BFX tokens are worth $0... anyone on the buying end of that transaction is a moron.



Disclaimer: By providing links to other sites, FatWallet.com does not guarantee, approve or endorse the information or products available at these sites, nor does a link indicate any association with or endorsement by the linked site to FatWallet.com.

Thanks for visiting FatWallet.com. Join for free to remove this ad.

While FatWallet makes every effort to post correct information, offers are subject to change without notice.
Some exclusions may apply based upon merchant policies.
© 1999-2017