Bitfinex Parent Company Repurchases Shares to Streamline Ownership Structure
In response to recent regulatory challenges, iFinex Inc., the parent company of Bitfinex, is planning to repurchase shares worth $150 million from its shareholders. This buyback represents approximately 9% of the company’s total outstanding capital and aims to provide iFinex with greater control over its private dealings and simplify its ownership structure. The move follows an offer made by iFinex on September 22 to buy back 15 million shares at a rate of $10 per share. This initiative values the company at $1.7 billion and is contingent on cash infusion from one of iFinex’s subsidiaries.
Addressing Shareholders Affected by the Bitfinex Hack
The share buyback initiative not only serves as a strategic response to iFinex’s positive performance but also offers an exit option for shareholders who acquired iFinex shares through BnkToTheFuture. These shareholders have been holding relatively illiquid investments since Bitfinex suffered a $71 million Bitcoin hack in 2016. As compensation for the hack, Bitfinex issued BFX tokens, which could later be exchanged for shares in iFinex. Several directors at iFinex and its subsidiaries will participate in the share buyback, with a deadline set for October 24.
Arrests Made in Connection with the Bitfinex Hack
A New York couple linked to the Bitfinex hack was recently arrested and pleaded guilty to a money laundering conspiracy. Ilya Lichtenstein and Heather Morgan were apprehended after authorities traced around 95,000 stolen Bitcoins, valued at $2.8 billion today, to their digital wallets. Lichtenstein confessed to infiltrating Bitfinex’s network and executing fraudulent transactions, resulting in the siphoning of 119,754 bitcoins. Morgan aided in laundering the funds. Both individuals face significant prison terms if convicted.
Recovery of Funds and Legal Victories
In July, Bitfinex announced that it had received funds from the United States Department of Homeland Security, which were being used to redeem Recovery Right Tokens issued to account holders affected by the 2016 hack. These tokens serve as speculative compensation for the victims. Additionally, in August 2023, Tether and Bitfinex achieved a legal victory when a U.S. District Court dismissed a class-action lawsuit alleging misconduct. The court found no evidence of any reduction in the value of Tether’s stablecoin, USDT.
Bitfinex’s Resilience and International Expansion
Despite facing regulatory challenges, Bitfinex has displayed resilience during market volatility and has actively pursued opportunities in international markets. Earlier this year, Bitfinex became the first cryptocurrency exchange to secure a license in El Salvador. This demonstrates the company’s determination to navigate changing regulatory landscapes while expanding its presence globally.
Hot Take: iFinex Repurchase Shares to Strengthen Control Amidst Regulatory Challenges
iFinex’s decision to repurchase shares worth $150 million showcases its commitment to gaining greater control over its private dealings and streamlining its ownership structure amidst evolving regulatory challenges. By offering shareholders an exit option through this buyback initiative, iFinex addresses the concerns of those who acquired shares after the Bitfinex hack in 2016. This strategic move not only highlights iFinex’s positive performance but also positions it as a resilient player in the crypto industry. With recent arrests made in connection with the hack and legal victories against allegations of misconduct, Bitfinex continues to demonstrate its ability to overcome obstacles while pursuing international expansion efforts.
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