iFinex Proposes $150 Million Stock Buyback as Compensation for 2016 Bitfinex Hack
Summary:
iFinex, Bitfinex's parent company, plans to repurchase $150 million of its shares from stakeholders, initially offered as compensation following a $71 million crypto hack in 2016. This plan is detailed in a shareholder letter from September 22. The move, which offers $10 per share, will allow investors to exit what is considered an illiquid investment. Primarily, iFinex and affiliate company directors are eligible to participate. The firm intends to run the buyback program until the maximum proposed amount is reached. Shareholders have until October 24 to decide if they want to sell their stakes back to iFinex.
iFinex, the parent entity of Bitfinex, has put forth a proposition to repurchase $150 million of its own shares from stakeholders. These shares had been offered as part of a compensation package after a $71 million crypto hack in 2016 on the Bitfinex platform. The news was cited by Bloomberg. In a shareholder letter issued on 22nd September, iFinex outlined its intent to repurchase $150 million in shares. To aid the financial recovery of users affected by the 2016 hack, which saw a nearly 36% reduction in user balances in Bitcoin, the digital asset company proposed a share price of $10. Bitfinex, lacking the needed cash reserves to reimburse users for their losses, opted to provide recovery-right-tokens and share equity as reparation. The shareholders had the choice between the two compensations. The 2016 share offer occurred through a partnership with the investment platform, BnkToTheFuture, which allowed the affected users to receive BFX tokens. iFinex could then redeem these tokens for company shares via BnkToTheFuture. The offered price placed iFinex's valuation at an impressive $1.7 billion, a large leap from its 2016 self-assessment of $120 million. Owing to the company's "solid performance" over the past several years, iFinex views the proposed buyback program as an opportunity for investors to extricate themselves from a relatively illiquid investment. Predominantly, directors at iFinex or affiliate companies are eligible to participate. The program doesn't mandate a minimum share threshold, and iFinex asserts it is ready to purchase all available shares until the buyback limit is hit. Stipulated by the agreement, shareholders have until October 24 to decide whether they will sell their stakes back to iFinex.
Published At
10/11/2023 12:27:18 PM
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