I am not familiar with the early days of BitFinex, and I hope the conclusion the two articles point to may not be true.

How come so many people managed to trust BitFinex that appears to have such opaque management?

If it's an insider job by the founder, why did (s)he not withdraw 100% of the assets in the exchange? Probably to make it look more likely to be done by an outsider(s)?

If I recall correctly 100% of the assets that were withdrawable were actually withdrawed.

edit: Well regardless of that being the case, why would an attacker not withdraw all the funds they can lay their hands on?

Many people seem to believe the bitcoin-exchange-as-a-scam thing is worthwile, but I don't think it really is. Karpeles is in jail, and will be for a very long time, and I've heard he doesn't enjoy his jail time much.

The identities of these people are known, their spending can be tracked. I can't see how the life of a exchange scammer is in anyway more attractive than that of a straightforward exchange runner. What are they going to do, cash out a couple of million somewhere and emigrate to South America? They could do the same simply by selling their exchange. Besides, Dread Pirate Roberts showed that emigrating is not really attractive to many people, even when not doing so is a terrible idea.

Mark Karpeles is not currently incarcerated and is busying himself by taunting the twitterverse.

https://news.bitcoin.com/inside-scoop-mark-karpeles-release/

https://twitter.com/magicaltux?lang=en

Oh wow, that news totally passed me by. The knowledge that he was in jail had a definite positive impact on my quality of life.

wow, it was perhaps light grey but knowing that, now it's almost black. Thanks for sharing. :-)

> BitFinex has been in previous trouble with the CFTC over customer account custody issues.[2] Having multi-sig keys doesn't help if the exchange has the keys.

If bitfinex hadn't implemented the segregated accounts, they would probably be much better off. One reason for segregated accounts was speculated to be the CFTC trouble.

That's ridiculous. If they want to avoid trouble with CFTC the answer is to register with them, not some home cooked idea that segregated wallets would keep them clean. I simply can't believe that the CFTC would take a second look at their BitGo setup and say "sure, go ahead, no need to register anymore". I don't even believe that was the intention, it's wishful thinking in hindsight by the spectators over at Reddit.

Yeah, it would be stupid if it was the only action. As I understood, they paid 75kusd fine, then applied for the license as well, and did bunch of other compliance-actions. Segregated wallets were one of those.

The exact discussions/dealings between CFTC and bitfinex are of course unknown.