Hong Kong’s iFinex Inc., the parent company of the popular Bitfinex cryptocurrency exchange platform, is planning to repurchase 15 million shares at a staggering valuation of $1.7 billion, according to a recent Bloomberg report.
The decision to buy back shares is driven by a need to consolidate private operations, especially with the increasing scrutiny from regulators in the cryptocurrency industry. It’s a strategic move to fortify control over the company in these uncertain times.
Bitfinex Eyes Private Operations
iFinex has offered to repurchase shares at $10 each, making 15 million shares. This repurchase represents about 9% of iFinex’s total outstanding capital, establishing the company’s worth of approximately $1.7 billion. Meanwhile, there’s a crucial condition attached to this proposal: iFinex must first receive substantial cash inflows from one or more of its subsidiary businesses.
In 2016, iFinex faced a significant setback when Bitfinex lost approximately $71 million in Bitcoin due to a security breach. In today’s market, that’s valued at around $3.3 billion. Bitfinex issued BFX tokens to affected users to make amends, which were later exchanged for iFinex shares through BnkToTheFuture.
The share buyback offer is open until October 24, and there’s no minimum requirement for shares to participate in the deal. Meanwhile, some key figures within iFinex and its associated companies, including Giancarlo Devasini, the CFO of both Tether and Bitfinex, are eligible to participate in this opportunity.
While the details of this repurchase remain undisclosed, it’s evident that iFinex, BitFinex’s parent company, is taking steps to provide value to its shareholders in a market that’s constantly evolving and demanding agility and resilience.
Navigating Regulatory Challenges
The company attributes this buyback to its “positive performance” over recent years. It’s not just about consolidating control but also about addressing and supporting Bitfinex Group’s evolving regulatory needs. Tether and Bitfinex have both faced regulatory challenges, including a substantial $18.5 million fine imposed by U.S. regulators in 2021. Several other crypto companies and exchanges like Binance, Coinbase, and Kraken have also faced heightened regulatory challenges lately.
As such, Bitfinex and other major players are adapting to changing dynamics in the nascent market in the absence of comprehensive regulations by financial regulators like the SEC.