Bitfinex owner offers hack victims 3,200% return through share buyback offer

The owner of crypto exchange Bitfinex has offered investors the chance to participate in a share buyback program, and victims of a 2016 hack might be massive beneficiaries.

British Virgin Islands-based firm iFinex has offered to buy $150 million worth of its shares back from investors. The offer could see the victims of a hack on Bitfinex realise a nearly 33-fold return.

Bitfinex gave users BFX tokens in 2016 — with a face value of $1 — after just over 119,000 Bitcoins were stolen, worth about $72 million at the time and over $3 billion today.

Its parent company iFinex then allowed victims of the hack to exchange these tokens for shares in its company through online investment firm BnkToTheFuture in April 2016.

“iFinex is allowing its shareholders to participate in a share buyback, which was launched as a result of the positive performance of the iFinex platform over the last few years,” a Bitfinex spokesperson told DL News.

The funds for the buyback program will come from iFinex’s “own undistributed profits,” the firm said.

Victims of the 2016 hack received equity at the “low price of $0.30,” Simon Dixon, CEO of BnkToTheFuture told DL News.

With the current offer of $10 per share, which is also extended to BnkToTheFuture investors, there’s an “impressive return of up to 33 times some investors’ initial investment,” which doesn’t factor in dividends or the recovery of hacked funds, he added.

“In a time where Chapter 11 bankruptcies often yield mere pennies on the dollars, this case exemplifies how financial innovation markedly outperformed conventional bankruptcy procedures for those affected,” Dixon said.

Adam Morgan McCarthy is DL News’ London-based Markets Correspondent. Got a tip? Reach out at adam@dlnews.com. Tim Craig is DL News’ Edinburgh-based DeFi Correspondent. Reach out to him with tips at tim@dlnews.com.