Bitfinex ‘Bail-In’ – New Financial System Offers Laboratory For Handling Unexpected Losses
Matt Levine, a former investment banker and mergers and acquisitions lawyer, sees the Bitfinex ‘bail-in’ as an early step in bitcoin’s attempt to address unexpected financial fallouts. Writing in his ‘Money Stuff’ column for Bloomberg, he noted there will be more such crises to come, and he is hopeful bitcoin/blockchain will be able to come up with solutions.
He thinks that the innovation in the bitcoin/blockchain financial system taking place could give direction to more traditional finance.
Bitfinex Hack Was Unique Levine noted that Bitfinex, which suffered a $71 million hacking attack, is not the first bitcoin exchange to be hacked, but the hack was unique in some ways. In most cases, hackers steal bitcoins from an exchange wallet, and the exchange then passes the losses to its customers. In Bitfinex’s case, there was a separate wallet for each client. So instead of stealing 36 percent from all the customers, they stole all the bitcoin from 36 percent of the customers.
This post was published at Crypto Coins News on 12/08/2016.