Will Bitfinex’s “Loss Socialization” Hold Up in Court?

Spoke to a lawyer, there is no way Bitfinex's "loss socialization" plan holds up in court. This is going to be…interesting.
— Emin Gn Sirer (@el33th4xor) August 6, 2016

Is Bitfinex’s loss socialization decision legally viable? Cornell University Professor Emin Gn Sirer doesn’t seem to think so.
The online cryptocurrency exchange experienced a hack earlier this month, resulting in a large-scale theft, causing the price of Bitcoin to drop to about $530 USD over the course of the day. In response to the loss of about $70 million worth of Bitcoin, Bitfinex has decided to socialize the loss by distributing it amongst their customer base, causing them to each lose 36% of their cryptocurrency holdings in the company.
However, that decision may not hold up. According to Sirer, who is a co-founder at IC3 (Initiative for Cryptocurrencies and Contracts), spreading the company’s losses among customers may cause legal complications:

This post was published at Coin Telegraph on 2016-08-08.

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