Hacked Bitcoin firm plans to spread losses across all users

I recently met a kid that lost 1 million dollars worth of bitcoins. He built a site and all money was hacked and stolen from the database when he was 14.

So maybe I'm just jaded and I've worked through enough bankruptcy filings in my life but the first thing that would come to mind is who exactly is going to do the auditing and hair cut?

Is it the exchange or is it a licensed bankruptcy trustee like www.pwc.com?

If things are above board then it almost by definition will be the later. If on the other hand its the exchange doing the haircut then you have to trust that they'll be honest about it....I mean with millions involved that's alot of trust.

I hope the exchanges assets are sold off first to help pay off the missing bitcoins because if the exchange is trying to force the loss onto its depositors and then keep running as a business then that's some really scummy behavior.

I'd assume the model would be Lehman brothers, force it into bankruptcy liquidate its assets, wipe out the owners so they don't benefit from their own mistakes and use the remaining funds to pay back creditors/depositors.

I fail to see how this would be anything other than theft if Bitfinex goes forward with this. Unless their terms of service have them setup as some form of co-op, I'd think they'll see a rush to the exits in the near-term, and be sued into oblivion on the long-term.

> I fail to see how this would be anything other than theft if Bitfinex goes forward with this.

It could be part of a liquidation. If Bitfinex owes more than it has, then it's going bust regardless. This is just a question of how its remaining funds are distributed amongst its creditors.

I don't see how they could intend to continue trading, since creditors could individually sue them for the funds that they are owed.

> Bitfinex revealed it had been hacked on Tuesday and suspended trading

That probably includes transferring to another BitCoin wallet.