Bitfinex Gives an Investigation Update – Bitcoin News


Bitfinex Gives an Investigation Update

Bitfinex has revealed more information concerning the investigation of the hack that took place on August 2. The exchange explains the company’s initial efforts to identify the hackers and the next steps for the business moving forward.

Also read: Swiss Capital Zurich Rejects Bitcoin Government

Bitfinex Hires Ledger Labs and Drops BitGo Services

UnknownThe Hong Kong-based cryptocurrency exchange Bitfinex is back up and operational. The exchange has positioned itself as the leader of USD/BTC volume once again this week, but spectators have been skeptical that a lot of the action is due to massive moves toward withdrawals.

On August 17, the company released a statement concerning the recent hack and how it will service BFX token-holders.

Immediately after the hack had taken place, with a loss of 119,756 bitcoins, the company hired Ledger Labs Inc., a top blockchain forensics and technology firm to help with the investigation. The blockchain analysis firm is still working on the case, and Ledger Labs is also performing an audit of the company’s complete balance sheet.

Bitfinex states in its announcement:

The exact attack vector is as yet unknown, but Ledger Labs has already identified certain areas in our architecture that can be improved. Ledger Labs is working closely with our development and operations personnel to ensure that all of their recommendations are understood and fully implemented.

NoGoWhat the exchange does know is that the bitcoins released were never realized by the third party multi-signature service BitGo, and they never alerted the Bitfinex team. The Hong Kong exchange says they have suspended BitGo’s segregated multi-signature wallet solution and have reinstated a different multi-signature cold storage procedure.

The company says the solution is safer and more robust with less exposure to coins within their hot wallet system. The company is in the midst of researching other storage options both internally and from alternative third party multi-sig vendors.

The Exchange Says Rumors Circulating Concerning BFX Token Holders Are ‘False’

Additionally, the exchange addresses the payback solution they’ve provided to BFX token-holders. The company explains many of the rumors circulating concerning making good with its customer base are inaccurate. Bitfinex explains that the socialized loss has affected everyone, including company representatives:   

We would like to address some stories that have circulated online stating that management has contributed no property to compensating our customers. This is false. Management has committed all reserves of the business with a view to making our customers whole. Moreover, any principals and employees of the business with any property on Bitfinex were subject to the loss allocation. In point of fact, two out of the top ten BFX token-holders are in our management team. We assure everyone that we feel the loss acutely, both as a company and as individual customers.

bfxomnid72bdHowever, allocations were also made to pay for forensic investigators, auditors, and advisors to help with the issue. They believe this will assist the company and make sure an attack like this never happens again. Bitfinex says they are committed to “deploying all of our resources” to make customers funds whole again. For instance, the exchange is engaged in converting certain qualifying token-holders to shareholders of the company and the remaining BFX tokens through a “combination of new capital and earnings.”

Bitfinex says they will continue to listen to their customer’s concerns and feedback. The exchange says they are “deeply grateful” to their patron’s patience and they will continue to provide further updates when the time is right.

What do you think about Bitfinex’s latest update concerning the hack of 119,756 Bitcoins? Do you believe they are going to make good with their customer base? Let us know in the comments below.

Tags in this story
BFX token, BitFinex, BitGo, Hack, Multi-signature

Images courtesy of Pixabay, and a Steemit blog.

Jamie Redman

Jamie Redman is the News Lead at News and a financial tech journalist living in Florida. Redman has been an active member of the cryptocurrency community since 2011. He has a passion for Bitcoin, open-source code, and decentralized applications. Since September 2015, Redman has written more than 6,000 articles for News about the disruptive protocols emerging today.

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