Bitfinex Parent Company iFinex Considers $150 Million Share Buyback

The owner of the crypto exchange Bitfinex, iFinex Inc., is considering a share buyback offer of $150 million. This initiative aims to provide relief to the investors, who were originally compensated with BFX tokens after Bitfinex suffered a substantial hack in 2016.

According to a report by Bloomberg, this proposal is equivalent to 9% of iFinex's outstanding capital and places the company at a valuation of $1.7 billion. The offer targets shareholders who obtained iFinex's stock as part of a swap arrangement with the investment platform BnkToTheFuture in 2016.

Bitfinex Navigates Control and Compliance

Additionally, the proposed share buyback is driven by a desire to have more control over the company's operations, especially with the increasing regulatory scrutiny in the crypto industry. As the regulators globally intensify their focus on the sector, this buyback could offer iFinex greater autonomy and financial flexibility.

Following a hack in 2016 that led to a loss of approximately $71 million worth of Bitcoin on Bitfinex at the time, the crypto exchange issued BFX tokens. Subsequently, iFinex redeemed the tokens in exchange for its shares through BnkToTheFuture. These shares are the subject of the buyback offer and give those impacted by the hack a chance to regain some of their losses.

According to iFinex, the choice to proceed with the share buyback is influenced by the company's strong performance in recent years. This strong performance has reportedly resulted in increased requests for regulatory compliance and transparency from the company. By buying back shares, iFinex aims to ease these demands and provide investors with a more liquid exit strategy.

Bitfinex’s Recovery Post-hack

The share buyback offer is open to the directors of iFinex and its subsidiaries. Notably, iFinex Inc. and Tether Holdings Ltd., two major players in the cryptocurrency industry, share common directors. However, iFinex's valuation for this buyback was determined internally, with no assessment from any external third party. The company has given its shareholders until October 24 to decide whether they wish to participate in this buyback initiative.

In August, a resident of New York, Ilya Lichtenstein, admitted to orchestrating the 2016 Bitfinex hack, which resulted in the loss of approximately $4.5 billion worth of Bitcoins. Moreover, Lichtenstein confessed to his involvement in laundering the stolen cryptocurrency. These admissions occurred in a federal court in Washington, D.C., as Lichtenstein and his wife, Heather Rhiannon Morgan, faced the legal consequences of their actions.

During the plea hearing, it came to light that Lichtenstein had converted some of the stolen Bitcoins into gold and hid it in a secret location. Additionally, Lichtenstein is said to have traveled to Ukraine and Kazakhstan to launder the stolen funds.