Bitfinex Announces $150 Million Share Buyback to Protect Hack Victims
iFinex, the parent company of Bitfinex exchange, has revealed its plans to conduct a $150 million share buyback. The move aims to provide support to the victims of the 2016 hack and gain more control over the company’s operations in light of increasing regulatory scrutiny.
Details of the Share Buyback
iFinex Inc., based in Hong Kong and connected to stablecoin issuer Tether Holdings Ltd., has offered shareholders the opportunity to purchase 15 million shares at $10 per share. This buyback represents approximately 9% of iFinex’s total outstanding capital and values the firm at $1.7 billion. The completion of the deal is dependent on iFinex securing funding from one of its subsidiaries.
The offer is specifically available to shareholders who obtained iFinex stock through a 2016 swap arrangement with BnkToTheFuture, an investment platform. Following a hack that resulted in the theft of around $71 million worth of Bitcoin, Bitfinex compensated affected users with BFX tokens, which were later exchanged for shares in iFinex through BnkToTheFuture.
Several directors at iFinex and its subsidiaries will participate in the share buyback. In a statement to Bloomberg, iFinex mentioned that this decision was motivated by the company’s positive performance in recent years.
Benefits for Investors
The divestment of shares allows investors to alleviate the mounting pressures associated with complying with regulatory requests and facing increased scrutiny from Bitfinex Group. It also enables them to exit an illiquid investment.
Bitfinex’s Resilience Amid Regulatory Challenges
Tether and Bitfinex have encountered regulatory obstacles in the past, including a combined $42.5 million fine imposed by U.S. regulators in 2021. The fine aimed to resolve allegations that Tether provided false information about the reserves backing its USDT stablecoin and that Bitfinex served U.S. customers without proper approvals.
Despite these challenges, Bitfinex has demonstrated strong resilience during market volatility and continues to explore opportunities in international markets. Earlier this year, Bitfinex became the first crypto exchange to secure a license in El Salvador.
Hot Take: iFinex’s Share Buyback Aims to Protect Hack Victims and Strengthen Control
iFinex’s announcement of a $150 million share buyback demonstrates its commitment to supporting the victims of the 2016 hack and gaining more control over its operations. By repurchasing shares, iFinex aims to protect affected users and reduce regulatory pressures on investors. This move showcases Bitfinex’s determination to overcome regulatory challenges and its resilience in the face of market volatility.
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