On August 2, 2016, the leading bitcoin exchange by USD volume Bitfinex suffered a major hack that drained them of 119,756 bitcoins, forcing them to issue “Recovery Rights Tokens” as an IOU to customers. These tokens have been traded as BFX tokens, but the exchange announced today that it is now paying off the debt in full.
All BFX Tokens Redeemed
On April 3 at 8 p.m. UST (4 p.m. EST), Bitfinex stopped all trading of their BFX tokens and started allowing users to cash them out for their full value of $1 per BFX token. Calling it the “final redemption of BFX tokens,” all trades have been closed and margin trades canceled. Those with a negative balance of BFX tokens from a margin trade will see the corresponding negative USD balance in their account.
The BFX tokens will all be automatically converted and then destroyed after they have stopped trading. “Overall we expect the entire process to take approximately 25–35 minutes”, the exchange revealed, adding that “no BFX tokens will remain outstanding”. During the redemption process, “trading in all other pairs will continue throughout this process, with the the temporary inconvenience of not being able to withdraw or move between wallets”, the exchange warned. In the announcement, Bitfinex also thanked its customers for their patience, stating:
We are deeply grateful for the patience and trust of our customers and shareholders as we worked towards—and have achieved—full recovery in just eight months. Without the community’s support, Bitfinex could have easily become a footnote in the history of the digital token revolution, instead of a leader and trend-setter. Thank you.
The Road to Redemption
It has not been easy for Bitfinex after the August 2 hack. After issuing a temporary token, a simple IOU of customer funds which couldn’t be immediately traded on the market, the exchange then finalized its recovery plans and issued the BFX recovery rights tokens. Secondary markets started trading this token immediately, for the low price of two and a half cents on the dollar at first.
However, rumors circulated that BFX tokens were just a scam to buy more time and Bitfinex had to constantly reassure token holders that their plan would eventually work, and that this day would come. On September 1, the company even bought back the first 1.1% of the tokens outstanding, which helped some in the community to keep faith in the company while others were still pessimistic for several months.
After much effort at the end of last year, including adding a few new trading pairs, enabling faster withdrawals, and creating an OTC trading desk for larger trades, the exchange’s volume picked up which enabled it to get out of debt at a faster pace.
In Monday’s announcement, the company cited several factors which made this redemption possible. They include “a dramatic uptick in equity conversions” and “record operating results in March.” Bitfinex also gave itself some credit for “making the decision to reduce our reserves in favor of this opportunity.”
By the end of the week, Bitfinex plans to send more information to its shareholders to inform them of what to expect over the coming months.
What do you think of Bitfinex redeeming 100% of their BFX tokens? Let us know in the comments section below.
Images via Shutterstock, Tradingview and Bitfinex
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The post Bitfinex Makes Good on Debt, 100% of BFX Tokens Redeemed appeared first on Bitcoin News.
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