The parent company of Bitfinex, iFinex, has proposed a buyback of $150 million worth of company stock as compensation for the $71 million hack that took place on the Bitfinex cryptocurrency exchange in 2016, as reported by Bloomberg.
The plans for stock repurchase were disclosed in a shareholder letter on September 22 by iFinex. To compensate shareholders for the 2016 Bitfinex hack, the digital asset company has offered to buy back shares at a rate of $10 per share, covering a total of 15 million shares allocated during the time of the hack.
The Bitfinex hack in 2016 resulted in a loss of approximately 36% of user balances, all in Bitcoin, and the cryptocurrency exchange did not possess sufficient cash to reimburse users for their losses. In response, Bitfinex has presented users with two options for compensation: Recovery Rights Tokens (RRT) or equity in the form of iFinex shares, aimed at bridging the balance gaps caused by the hack. Users have the choice between these two alternatives.
The iFinex shares were initially offered in conjunction with an investment platform, BnkToTheFuture, as part of a stock swap agreement in 2016. Affected users initially received RRT BFX tokens, which were later exchanged by iFinex for company shares through BnkToTheFuture. The offering price of $10 values iFinex at $1.7 billion, a substantial increase from its 2016 self-valuation of $120 million.
The buyback initiative is indicative of iFinex's strong performance in recent years, and it provides a means for investors to liquidate less easily traded assets.
