Breach of Duty: The Rights of Bitfinex Customers
In The News By Binnall Law Group - 2016/08/12 at 12:40am
There’s substantial discussion and confusion about the rights of Bitfinex customers and their ability to recoup their losses from the recent Bitfinex hack. After looking into the details, I think there may be a cause of action against Bitfinex for most customers in this position.
- When customers signed up for an account at Bitfinex, the Terms of Service created a binding legal contract between the customers and Bitfinex. That contract confirms that the bitcoin in Bitfinex wallets (at any time) belongs to the customer and is owned by the customer. This means that Bitfinex must let customers withdraw that amount of bitcoin. Giving you ‘BFX Tokens’ probably does not satisfy this obligation. Arguably, this applies to customers who held USD, ETH, ETC, and LTC too.
- There may also be other claims, like fraudulent conversion, if any of a customer’s funds were taken by Bitfinex and applied to other customers for purposes of “socializing” losses.
- In any case, there may be a claim against Bitfinex in negligence, or breach of fiduciary duty, because Bitfinex breached a duty of care to you by failing to securely protect customers’ bitcoin.
- Finally, if you are a US customer of Bitfinex and you weren’t able to withdraw the full amount of your USD, you may also have a claim to recover the full value of your USD.
Even if you have sold your BFX Tokens, you may still have a claim.
Disclaimer: This summary is not legal advice and is not protected by the attorney-client privilege. No attorney-client relationship exists or will exist until we both agree to enter into such an agreement