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Forced Bitfinex liquidation (self.Bitcoin)

chargingwhaleredditor for 4 hours が 投稿

I am/was a whale on Bitfinex.

I am not pleased with the non-update today, and the general wording by Bitfinex. Especially talking about "customer losses", "all possible options" and "not affected".

As I see it, Bitfinex got hacked and lost a big amount of Bitcoins they owe their users. I assume they can't cover all losses. This makes them bankrupt.

I won't accept a haircut or 100% loss for (selected) Bitcoin users only.

I plan to prepare for a legal case to put them in bankruptcy and to share all left over values among all users.

Who wants to join in?

Who has details and information on how to proceed?

I am unsure if Hongkong or Taipei is the place to call, and how to proceed.

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[–]GandalfBitcoin [スコア非表示]  (2子コメント)

If you are preparing the legal case, you should try to include the BitGo (a VC backed company).

Because they have a least half of the responsibilities for the Bitfinex Breach, and they may have the ability to bear some money too.

[–]xzars1 [スコア非表示]  (0子コメント)

AFAIK, they are no longer operating in Hong Kong and they are not domiciled there either. Word is that they moved their back office operations to Taipei in Taiwan, but the company is domiciled in a offshore tax haven.

It's a complicated case. But I recommend you start by contacting BitGo. They can at least tell you based on the contract details what is the legal entity of their customer Bitfinex, and where they REALLY are domiciled and operating. That will at least point you to the correct jurisdiction.

[–]eucryptic1 [スコア非表示]  (0子コメント)

If you file a legal case, you better hurry up and get in front of a judge. File an injunction blocking their petition for bankruptcy. You might be able to get a secured interest in a liquidation proceeding (Ch 7) maybe, but I sincerely doubt you will ever see the bitcoin.

[–]rlflack2redditor for a day [スコア非表示]  (0子コメント)

They are not bankrupt if they are not liable for the BTC loss, which seems to be their position, buttressed by the terms and conditions.

[–]lockhedge [スコア非表示]  (0子コメント)

I am unsure if Hongkong or Taipei is the place to call, and how to proceed

they (two separate firms BFXNA Inc. for US customers and IFINEX Inc. for the rest of the world) are BVI companies https://en.wikipedia.org/wiki/British_Virgin_Islands_bankruptcy_law

[–]Crypto_Economist42redditor for 1 month [スコア非表示]  (4子コメント)

/u/chargingwhale All depositors have to share in the loss, it's the only fair way. And this is how it works according to the law (unless bitfinex can make everyone whole on their own).

The only way to make this happen (unless BFX does it themselves) is a forced Bankruptcy and immediate injunction to freeze all deposits/withdrawals by the courts. In a bankruptcy, the depositors funds become assets that creditors can claim damages against.

The timeline on this is very short. Paperwork has to be filed yesterday.

[–]daoholderredditor for 2 months [スコア非表示]  (3子コメント)

no, it is not. some depositors deposited USD, knowing that this asset is less risky than cryptos are. the others deposited BTC, taking higher risks coming from BTC transaction irreversability. Name one good reason, why USD depositors should take BTC depositor risks, especially taking into the account BFX's terms of use?

[–]Crypto_Economist42redditor for 1 month [スコア非表示]  (1子コメント)

Because thats what the law says. All their assets become things that creditors can claim against in bankruptcy proceedings. Customer deposits become are their assets, and they have a liability to pay them back. Like it or not, thats the law.

[–]daoholderredditor for 2 months [スコア非表示]  (0子コメント)

Have you even read the terms of bfx use?

[–]bobabouey [スコア非表示]  (0子コメント)

You didn't deposit USD into a bank or something similar. You deposited USD into an offshore private company with limited financial information available, for the purpose of having that company lend the dollars to speculators, some on margin, of various cryptocurrencies.

It doesn't seem any less risky than investing in cryptos to me.

I think that whichever approach bitfinex takes (individualized or socialized lossses), the losing side is likely to get together to sue. There is enough money at stake, and the legal issues are complex. There are arguments the accounts were segregated, and there are arguments they are not.

And, if they take the individualized approach, those who get their money / crypto out are not home free. If the company later goes in to bankruptcy, those payments could be pursued as preference payments, subject to disgorgement.

[–]yogibreakdanceredditor for 1 month [スコア非表示]  (2子コメント)

should let them run the business and keep paying back from trading fee. It worked well before with Polo, but it will take several years with this scale of loss, if they don't get more hacks though.

[–]n2yolo [スコア非表示]  (0子コメント)

I never thought I'd ever say this.... Unfortunately they aren't federally regulated.

[–]markcoll [スコア非表示]  (0子コメント)

They are 100% secure tho /s

[–]No-btc-classic [スコア非表示]  (0子コメント)

I feel bad for the liquidity providers. Bitfinex tried to pitch it as being "low-risk" hah.

[–]mindragon [スコア非表示]  (0子コメント)

If anyone is interested in recovering funds from Bitfinex, please contact me.

[–]cold_bluffer [スコア非表示]  (0子コメント)

Who ever has a substantial BTC balance or Lent USD/Btc tied in Bitfinex, PM me, we are forming a group of interest with interesting information.

[–]TechWizardry [スコア非表示]  (0子コメント)

I think a class action against BitGo might be much more successful. They are in the US and could be liable, regardless of the fact that Bitfinex supposedly did not have insurance. They fact that customer money was held at BitGo, along with their limits being circumvented, may be sufficient in court. We still don't know the exact nature of the breach so it may be premature to make any legal maneuvers just yet. Just saying.

[–]dwdoc [スコア非表示]  (4子コメント)

Bitfinex should negotiate. Offer hacker $10 million and agree to drop investigation in return for stolen BTC.

[–]RoadStress [スコア非表示]  (1子コメント)

Why would the hacker agree to this deal? If it wasn't an inside job I think that there are almost 0% chances that he will get caught. I am basing my opinion on the past hacks.

[–]jwBTC [スコア非表示]  (0子コメント)

Trying to negotiate when you have ZERO leverage. Heh.

[–]w2qw [スコア非表示]  (0子コメント)

lol

[–]TheBitcoinArmy [スコア非表示]  (0子コメント)

this

[–]TheBitcoinArmy [スコア非表示]  (2子コメント)

You wont take 70% with some IOUs? you'd rather some pain in the arse legal route that takes years, fuck that.

[–]workorpork [スコア非表示]  (0子コメント)

Where did you get this 70% figure? All the analyses ive seen here point to an approx. 80% haircut for btc holders and USD margin funders, fuck that.

[–]chargingwhaleredditor for 4 hours[S] [スコア非表示]  (0子コメント)

Where do those numbers come from? I would settle with such a proposal, yes. Edit: if all relevant numbers are published and those 70% are resulting from a fair procedure (tm).

[–]Frogolocalypse [スコア非表示]  (2子コメント)

The people that used to run bitfinex probably aren't running it anymore.

[–]zanetackett [スコア非表示]  (1子コメント)

I don't know what makes you think that, we're all still here working on getting this resolved to the best of our ability.

[–]Frogolocalypse [スコア非表示]  (0子コメント)

Because if you're insolvent, any responsible business managers would be handing over the assets to specialists who would be better suited to getting the business out of the hole they're in (and ensuring the creditors can retrieve as much of their money as possible), rather than relying upon the people who put them in it in the first place.

[–]fuzee_64 [スコア非表示]  (0子コメント)

You read my mind completely with this post

[–]workorpork [スコア非表示]  (3子コメント)

I am interested in taking legal action. PM me if you are taking any steps.

I believe they are planning to commit criminal offenses by selectively favoring certain counter parties and allowing them to withdraw their balances, court need to step in a relieve them of control.

[–]whatisgoingonhereoyredditor for 1 month [スコア非表示]  (2子コメント)

I have seen this with number of failures, hack/insider money lost, fake whales making noise and nothing else happened.

If you are a whale you said you are you had to know your deposit/trading/exchange wallet, share it with us, sign a tx from one of the wallets connected with bitfinex wallets and ONLY after that we can start talking.

I can say I was whale to just for attention seeking, prove it and we will talk money

[–]workorpork [スコア非表示]  (1子コメント)

What the fuck are you talking about?

[–]whatisgoingonhereoyredditor for 1 month [スコア非表示]  (0子コメント)

which part you require deeper explanations for?

[–]Hitchslappy [スコア非表示]  (8子コメント)

Nothing says trustworthy like redditor for 0 hours.

[–]workorpork [スコア非表示]  (3子コメント)

Where is he asking for your trust?

[–]Hitchslappy [スコア非表示]  (2子コメント)

Isn't it implicit in asking people to join him in what could be a lengthy and expensive legal battle?

[–]workorpork [スコア非表示]  (1子コメント)

Well its not like he is asking people to make a decision based on only what he wrote.

[–]Hitchslappy [スコア非表示]  (0子コメント)

No I guess not, it just seems a bit odd to me.

[–]chargingwhaleredditor for 4 hours[S] [スコア非表示]  (0子コメント)

Redditor for 3 hours, better?

I am a well known member of the community. At this point I choose not to disclose my regular account. My favorite outcome would still be that a legal case isn't necessary.

Should it come to a legal case, pretty much all of my info will be public anyway. As soon as there's enough info available I will decide if I will pursue this or not. And will gladly publish my info and put coins in escrow for this.

And no, I'm not asking for trust or funds or whatnot. I ask for other potential victims to combine forces, should it come to this.

[–]Reddit_Is_Trash_ [スコア非表示]  (2子コメント)

And nothing says irrational and paranoid like "only trusts long time redditors"

[–]Hitchslappy [スコア非表示]  (1子コメント)

I confess I'm semi-paranoid when it comes to bitcoin and people who presumably have a real reddit account but choose not to use it when discussing things like this.

[–]--__--____--__-- [スコア非表示]  (0子コメント)

Losses should be socialized

[–]marcus_of_augustus [スコア非表示]  (1子コメント)

Good luck "whale" ... leaving coins on an exchange is just asking for it, sorry to say, but everyone's had fair warning.

[–]chargingwhaleredditor for 4 hours[S] [スコア非表示]  (0子コメント)

What kind of "fair warning"? I didn't use an exchange as my personal wallet, but to do speculation. Let me know where I can do margintrading without counterparty risk, and I'll have a very close look at that.

[–]-TheBaptist-redditor for a day [スコア非表示]  (4子コメント)

I don't feel sorry for whales who constantly short the market and make my coins worth less.

[–]chargingwhaleredditor for 4 hours[S] [スコア非表示]  (1子コメント)

Nope, I'm a permabull, and in 90% of the time I am in a position it's a long.

[–]-TheBaptist-redditor for a day [スコア非表示]  (0子コメント)

My excuses. My point still stands but in this case not directed at you.

[–]jaimewarlock [スコア非表示]  (1子コメント)

It is worse than that, whales will often dump up to 100k bitcoins to force longs to liquidate at a loss. Then the whales will just buy them all back after bitcoin prices have sharply dropped due to all the forced sales.

[–]dmmPker10 [スコア非表示]  (0子コメント)

I plan to take the same course of action if Bitfinex thinks they can just let "affected" users take the loss.

If they have any plan to reopen in the future and keep any trust with their current customer base, I'm sure they know the only option they have is finding a way to make EVERYBODY whole again. But like you have said, based on the wording thus far, that doesn't seem to be the case.

Here's to hoping they smarten up and make the right decision.

[–]BitderbergGroup [スコア非表示]  (0子コメント)

Whale or redditor for 4 hours, I don't wish to piss on your parade, but those coins have goooooooooooone!

The fact that you have made this silly post on reddit, about how your planning to prepare a legal case to put them in bankruptcy, and split the spoils, just HIGHLIGHTS your ignorance.