The Finexening - Bitfinex hack - #CryptoTrading

Published in Reports · Labeled as ·

Bitfinex was hacked in August 2016. Read the basic info about the hack and the best of Reddit's response on the Bitfinex hack from back then.

One of the largest cryptocurrency exchanges by volume, Bitfinex, was hacked in August 2016. They suffered a substantial monetary loss of 72 million USD in cryptocurrencies (based on exchange rates from August 2016) that was eventually returned to traders in form of redemption tokens, or RRT. Before that happened, users got a “haircut” – a socialized loss of 36% regardless of whether their assets were affected.

RRT is a token issued on the Omni platform to makeup for the USD value of the loss that was tradeable and eventually was paid for to the USD value of the user losses. This was a unique solution and some people who traded the token actively made good profits on it.

Zane Tackett mentioned throughout the original article has since stopped working for Bitfinex.

Original post from August 2016:

Reddit’s reactions

If you are reading this bit chances are you didn’t miss all the drama. The best source of information is probably their status page at bitfinex.statuspage.io, though the information is scarce. Zane Tackett /u/zanetackett is trying to keep the facade of the company and panic hasn’t kicked in but as for useful info he doesn’t provide much.

During the heist, only BTC assets were in fact taken by the hacker. Bad news for all ETH, ETC or LTC traders is that even though their assets were not affected by the hack, it seems they are lost too - just as USD assets, which were unaffected as well.

Aug 6, 2016: The most likely outcome is some form socialized loss - a haircut - if it can be made in a legal way. The official statement however is still “we have not decided yet”. Most traders conclude it was actually quite expected after the spectacular 24h downtime couple of weeks earlier during wild price movements. Though Kraken fails like this too, repeatedly, and no hack occured as of yet - so take out of it what you like.

Recording of Zane Tackett’s press conference on Whalepool TS:

vocaroo.com

Yes, Bitfinex takes part in paying the missing money. All customers will get a haircut of 36%. The hack wasn’t done via logging into customers accounts. There will be a shitcoin released to pay for the 36% that will not be paid back right now. No details about the hack.


Will it affect the general trust in cryptocurrencies?

Was the Bitfinex hack an inside job?

Maybe.

Can we learn from our mistakes for the next time?

Some say it was plain as a yoghurt that Finex would get hacked since it had strange downtimes during busy times - but so do many exchanges. It was hosted on an AWS - experts might cringe at that but Gemini also run on AWS and OKCoin International was too. Ask the bot coders - they know where to put their codes to be in the same datacenter as the exchange. There is no exchange that would keep their own bare metal in a server room. Cost cutting wins.

Only thing we can do is to NEVER baghold or anything like that: Send money to exchange, do the trade, send them to Trezor.

Who runs Bitfinex anyway?

Bitfinex’s CEO is a Dutch man Jean-Louis van der Velde. Here is his LinkedIn. Their risk manager is also public on LinkedIn - here. Their PR representative Zane Tackett is well known to anyone on Reddit - /u/zanetackett, loyal till his death and beyond. His boss is Phill Potter. However none of these people actually founded Bitfinex. The platform was fonded by a freelance sysadmin Raphael Nicolle with codebase from Bitcoinica, an exchange that was hacked back in the 2012.

Is someone liable for something? They had BitGo which is insured..?

Bitfinex used to advertize on their website the assets were insured through BitGo which handled their wallets.

The insurance however doesn’t cover this hack. BitGo supplied Bitfinex with an implementation of segregated user-specific wallets to fill the regulatory requirements that were raised by futures regulatory commissions - margin swaps offered on Finex were basically a futures product without the user specific wallets. However Bitfinex had complete control over the BitGo implementation and turned off some of its security functions (like, limits on withdrawals) for convenience.

USD funds for verified USA customers that came from US bank accounts were insured via SynapsePay.

Are now other exchanges that use BitGo vulnerable?

Kraken uses BitGo but with a different setup:

Poloniex … Well, who knows anything about Poloniex, right?

Is there still hope?

Bitfinex reps said the company will not pay for the losses of its customers. Bitstamp did, but the loss was smaller and they had VC funding. The only way a VC might want to flow into Bitfinex would probably be via an acquisition.

Bitfinex’s daily volume was known and it seems that a hack of this size wasn’t such a big hit really. However, Bitfinex reps refuse to state the exchange’s net worth.

The price action coming from this?

There was a major dump.

Category: Reports · Label: · Author: Altcointrading.net (contact author)

 

Last added to Crypto Airdrops, Bounties & Opportunities
Airdropped Token or Opportunity Airdrop Date About the airdrop Link
$DOT Polka Drop NFT Raffle Live Polka City is a contract-based Polkadot, DeFİ and, NFT cryptocurrency investment platform. They are running a raffle now where purchasing a ticket gets you chance to win an NFT art gallery that pays weekly yield and other commission-generating prizes. Cost of the ticket is 1000 POLC, the main prize generates 1041 POLC per week (50% APY). join
Searching for PIZZA MAN on Phemex Until 22 May (The BTC Pizza Day) To promote their new asset management service, Phemex is opening a quest to search for the og guy who spent 10K BTC on a pizza (Laszlo Hanyecz). They are going to offer him, and 100 winners, to get 1 day of interests on 10k BTC in the Phemex Earn Crypto asset management program. Earn Crypto promises up to 10% APY. Yearly compound rate of 10% translates to about 0.03% daily rate, which could earn up to 3 BTC during that single day. make account on phemex and submit gleam form
Binance to launch NFT marketplace June 2021 If you have not already, join Binance with referral code atnet10perc for 10% lifetime kickback. join
CoinBurp NFT Airdrop Until 7 May Coinburp drops BURP NFT tokens for easy social media follows. It is a governance and utility token and non-custodial NFT app. You gain 10 $BURP tokens for joining our community. gleam form
$ARN token airdrop Until 9 May ARN tokens up for grabs for a set of 8 easy social media tasks. join
$XYM Token giveaway on Latoken Until 10 May Complete simple social media tasks and get a chance to win 1000 XYM tokens ($230) in the giveaway on LATOKEN. join
SafeCovid huge marketing bounty Live SafeCovid is running a vast campaign for all types of content marketing. Blogs, videos, social media - there are categories for all types of content. Submissions need to be posted in bitcointalk thread and recorded into Google Spreadsheets. bitcointalk
Trade tokenized shares of Coinbase on FTX Open The FTX crypto derivative exchange, quickly gaining recognition in the crypto community, added tokenized trading of Coinbase IPO. Loads of other tokenized legacy assets already available. FTX does not require KYC until your total lifetime withdrawals reach 1000 USD. (More about FTX here). see the markets
PYR social media campaign March 14, 2021 for 6 Months till August 14 2021. PYR runs a long social media campaign. You need to engage in various social media channels without mentioning the bounty. Rules in the sign up form. form
Opportunity: Zero fees on DeFi tokens on Bitstamp Until end of May 2021 You can now trade ZRX, MKR, KNC, DAI and GUSD at Bitstamp. Aa a bonus this DeFi-focused batch of cryptocurrencies comes with zero trading fees until the end of May. If you have an old Bitstamp account laying about, might be worth a shot to trade or arbitrage there for a few weeks now. Bitstamp
Blockchain Space Telegram Bounty Until June 2021 Blockchain Space runs a Telegram activity bounty. The most active users will be paid 50 USDT every 15 days. info