Hacked Bitcoin Exchange to Distribute 36% Loss Across Users

Bitfinex, a popular Hong Kong-based Bitcoin exchange was hacked last week, losing about $70 million worth of customer’s bitcoin.

The loss caused the price of Bitcoin to drop about 20%, even though it has rebounded somewhat. 

Bitfinex used a service to individually separate each customer’s funds in unique wallets. This meant that only some customers’ funds were drained, while others retained their full balances.

As a solution to this problem, the exchange said it has “decided to generalize losses across all accounts.”

“Upon logging into the platform, customers will see that they have experienced a generalized loss percentage of 36.067%.”

According to Bitfinex, In order to compensate customers, they are planning on issuing a new token on the Omni protocol (shortcode “BFX”) to each customer equal to the amount of their discrete loss.

Tokens will be given without release or waiver and will be transferable on the blockchain. The BFX tokens will remain outstanding until repaid in full by Bitfinex or exchanged for shares of iFinex Inc.

Bitfinex also said it is also “actively talking with potential investors.”

“Raising capital is one strategy we are considering for making our customers whole. These discussions are at an early stage and will take time.”

Bitfinex has said that a total of 119,756 bitcoins were taken by hackers.