What will happen with funds drained from Bitfinex?
After Tuesday events, when networks drove news concerning to the loss of an important amount of money everywhere; the sum is close to $ 60 million until now. Owned by investors who had deposited their Bitcoins in Bitfinex company based in Hong Kong, this company is one of the most important Exchanges in Asia which transacts around 600,000 BTC per month and in a blink of an eye away 120,000 BTC.
In this particular, affected peolple demand and there are no clear answers. There is great secrecy when making remarks. Commissioned by the company Bitfinex, Mr. Zane Tackett, answers questions only by social networks where he says in one of his responses that soon we will be informed with more details about the incidents and Bitcoins accounts are the only affected. Of course the uncertainty grows and discomfort can be seen on social networks some users expressed much trouble despite having security measures such as two-factor authentication in these secondary devices which are used, such as a mobile phones to provide an additional security layer with your password. The truth is that no one knows how withdrawals were made. Some users claim that they had dollars in the account and do not know if they will be returned also other people show their disagreement with possible measures “is said that they want to socialize the losses among all users of the company, I don’t agree because my account was not in bitcoins” is a whole series of questions that have no answers for now.
Moreover, the source of vulnerability seems to be located in the way as the Bitfinex company structured its accounts and its use from the supplier of the Bitcoin wallet which is the BitGo company, they placed an additional security layer where it performs customer transactions in their folders with multiple signatures which are deposited. The keys are divided among a number of owners to manage risk a key is given to each client; however it seems that these measures were not enough.
What is not clear yet is “Who will pay for the losses?” Of course the Bitcoin business community has been affected, the cryptocurrency has lost value, bitcoin price has fallen considerably after this event and markets reflect it. The important thing is to highlight that blockchain technology as conceived is very transparent and safe, if protocols are followed. It is not the first time these events occur; however bitcoin has recovered.
What users don’t forget is that they relied on a company which had under protection two of the three keys that clients use and which are private. Of course it is necessary to get the funds that disappeared on the multiple firms. Some users believe that there are deficiencies in the security model proposed by BitGo. However; the company informed the media that after an internal investigation there is no evidence that their server has been violated.
Concluding, these events leave a great learning experience first, when an investor wants to invest in a business that is think that can give dividends, he must first investigate the advantages and possible disadvantages of this investment, seek information on specialized systems, it is not possible to leave all the confidence in the company efforts receiving the funds and in turn generating passwords, taking note of the time that their security systems have been compromised.
It is also important not leaving any funds of its assets in a single wallet, instead investigate whether it is possible to save its funds on different systems, cold purses, decentralized wallet, physic wallets are safe ways if you have a great assets sum, the important thing is to try as much as possible to improve the chosen security systems. Meanwhile, what can be extracted from what happened to Exchange Bitfinex is that the company generated two keys to move funds and these disappeared, the research carried out should answer the arising questions from users.
Disclaimer: This press release is for informational purposes only. Information does not constitute investment advice or an offer to invest. The views expressed in this article are those of the author and do not necessarily represent infocoin views and should not be attributed to Infocoin.