Updated Jan 26, 2024 at 7:18 p.m. UTC

Founded and operated by iFinex, Inc. in Hong Kong in 2012 and registered in the British Virgin Islands, Bitfinex is a cryptocurrency exchange. The three core features that Bitfinex offers are exchange trading, margin trading and margin funding. Furthermore iFinex Inc. operates both Bitfinex and Tether Ltd., the company behind the tether stablecoin.

Bitfinex has been hacked multiple times since its launch. In 2015, roughly 1,500 bitcoin were stolen from the exchange, worth roughly $400,000 at the time. In 2016, more than $60 million worth of cryptocurrencies were stolen from customer’s accounts. Bitfinex found multiple ways to refund the accounts for the first hack, varying from offering company equity to reimbursing victims with more money per bitcoin than at the point of the hack. Bitfinex shared the loss across all customer accounts, where every user would see a 36 percent loss on their account. To account for this loss, the company issued debt tokens (BFX) to their clients that could be used towards company equity or could be redeemed by Bitfinex.

In 2019, two Israeli brothers, Eli and Assaf Gigi, were arrested for their participation in the 2016 hack and some of the funds retrieved by the U.S. government were returned to their owners.

In 2019, New York Attorney General Letitia James obtained a court order against iFinex Inc. alleging that they used Tether funds to cover up an $850 million loss to Crypto Capital Corp.

Later in 2019, Bitfinex issued its own token, LEO. LEO is intended to optimize the trading process within the ecosystem. According to the white paper, some of the benefits of LEO will be a reduction in fees for lenders and takers that use Bitfinex as well as withdrawal and deposit fee reduction within the exchange. At the time of the sale, some alleged that Bitfinex was selling its tokens to make up for the $850 million loss. Bitfinex started buying back and burning LEO tokens from investors in June 2019.

Authored by John Metais

This article was originally published on Apr 28, 2020 at 2:53 p.m. UTC


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