Key Takeaways
- iFinex is ioffering $10 per share to shareholders for the 15 million shares distributed in the aftermath of the 2016 Bitfinex breach
- iFinex states the choice to proceed with the share buyback is influenced by the company’s strong performance in recent years.
iFinex Inc., the parent company of the cryptocurrency exchange Bitfinex, has proposed a significant buyback program worth $150 million to repurchase shares that were initially offered to compensate users affected by the 2016 Bitfinex hack, according to a recent report by Bloomberg.
In a shareholder letter dated September 22, iFinex unveiled its plan to repurchase shares at a rate of $10 per share. These shares were originally distributed as part of a stock swap deal in partnership with BnkToTheFuture, an investment platform, after Bitfinex suffered a substantial hack in 2016. The buyback offer extends to the 15 million shares that were initially distributed in the wake of the hack.
This move is significant, given that the $10 offering price sets the valuation of iFinex at $1.7 billion, which is a substantial increase from its self-valuation of $120 million in 2016. As per reports, the proposed buyback program accounts for roughly 9% of iFinex’s outstanding capital, and it reflects the company’s strong performance in recent years.
The original stock swap deal involved the issuance of RRT BFX tokens to users impacted by the 2016 hack. Eventually, these tokens were redeemed by iFinex for shares in the company through BnkToTheFuture. By offering to buy back these shares, iFinex aims to provide investors with an exit strategy for what has been a somewhat illiquid investment.
Additionally, the motivation behind this share buyback extends to the evolving regulatory landscape in the cryptocurrency industry. With global regulators intensifying their scrutiny of the sector, iFinex seeks to gain more autonomy and financial flexibility by regaining control over its operations.
The offer is open to a select group of directors from iFinex and its affiliated companies. Notably, both iFinex Inc. and Tether Holdings Ltd., two prominent entities in the cryptocurrency space, share common directors. It’s important to note that the valuation for this buyback was determined internally, without any external third-party assessment. Shareholders have until October 24 to decide whether they want to participate in this buyback initiative.
