Questions Bitfinex must answer
There are a lot of questions that people need answers to before they should trust Bitfinex with any of their funds. Also, read to the end to see why US customers should not attempt to sell their BFX.
Is Bitfinex insolvent?
Is Bitfinex insolvent? That is, does Bitfinex currently owe people more money than the total value of all of its assets and holdings? This should be a simple yes or no question.
If Bitfinex was not and is not insolvent:
If Bitfinex is not insolvent, what possible grounds can there be for making less than full repayment to depositors of assets not directly affected by the theft like those who deposited USD or ETH?
If Bitfinex is (or was) insolvent:
Presumably Bitfinex must be liable for the theft to be insolvent. Does Bitfinex concede liability for the theft? If so, under what legal theory?
Were none of the accounts stolen from actually segregated? Or were the funds segregated, but Bitfinex is nonetheless liable due to providing an inadequate standard or care? Were some stolen funds segregated and some not? Does Bitfinex concede liability for all of them?
Does Bitfinex claim that unilaterally imposing a "haircut" on depositors or issuing them some other asset somehow cured its insolvency? Is there any credible argument that Bitfinex may have been insolvent due to the theft but no longer is?
Does Bitfinex claim that without any adversarial process, it can reduce its obligations to depositors whose funds weren't in segregated accounts below the full amounts? Does Bitfinex claim they have in fact done so?
If Bitfinex is insolvent, how can it make full repayment on new deposits? Why wouldn't these be fraudulent transfers subject to clawback?
Why is Bitfinex not committing fraud by accepting new deposits of funds in exchange for promises it knows it cannot legally satisfy? Why is Bitfinex accepting deposits if it is insolvent?
Is BFX a security?
Is BFX a security under US law? If not, what is it?
If BFX is a security under US law, is it registered with the SEC?
If BFX is an unregistered security, is it illegal for US citizens to sell it per 15 USC 77(e)? If so, why does Bitfinex allow its US customers to offer BFX for sale, in apparent violation of US criminal law?
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Read my earlier Bitfinex articles such as this one or this one.
Read this Steem exclusive about how the regulations on banking violate rights, stifle innovation, and actually make it harder to fight crime.
Read this followup on the move to ban the $100 bill.
please answer the quesions
It's a pretty safe bet that Bitfinex is insolvent... and should be forced into bankruptcy liquidation proceedings by Hong Kong authorities.
Unfortunately, it's abundantly clear that regulators world wide have decided that they do not have the resources to protect people who choose to do business in the underground economy.
I'm not so sure. That would only be true if Bitfinex is liable for the theft. I believe at least most of the funds were in segregated accounts and had been legally delivered to the customers. If that's correct, then Bitfinex would only be liable if they didn't provide the legally required standard of care. It's not clear, at least to me, that they didn't.
Well, one thing is certain Bitfinex has a lot of heat on them, and people demand answers. Some say, there wasn't even a hack, and it could have been an inside job.
Exchanges are very non-transparent, and need to be more accountable. After all they are holding customers money.