The equity consists of shares of Bitfinex's owner, iFinex Inc.

The exchange comes in the wake of a serious security breach against the company and its customers, in which Bitfinex discovered the theft of approximately 119,756 bitcoins valued at more than $70 million.

"Since the theft more than two months ago, our primary objective has been to make our customers whole," said Philip Potter, Chief Strategy Officer at Bitfinex. "This is a significant step towards the recovery and stabilization of our company. We are very pleased with this highly favorable trend of conversions."

Daily trading and deposits on the Bitfinex exchange is also on the rise, yielding more volume and fees for the firm.

The Recovery Plan

Following the theft on August 2, 2016, management halted all trading, deposits, and withdrawals on its platform, assessed the damage, and finalized the accounting of losses. The company then generalized the losses across all accounts according to what was expected to transpire in a liquidation context. In place of the losses, Bitfinex credited tokens labeled "BFXs" to customer accounts to record each customer's dollarized loss. The tokens are contingent on the recovery of the stolen property, and remain outstanding, pending redemption for $1 per token by the company or pending exchange for shares of the capital stock of iFinex.

On September 2 and 30, 2016, the company announced the unilateral redemption of 1.1812% and 1.3152% of outstanding BFX tokens, respectively. Redemptions were applied pro rata to all settled wallet balances.

The company also assisted in developing two opportunities for customers to exchange their BFX tokens for capital stock of iFinex.

First, management collaborated with Simon Dixon and Bnk To The Future to create a Special Purpose Vehicle (SPV) that enabled qualified Bitfinex users to exchange their BFX tokens for beneficial interests in iFinex, at a value of $1 USD per BFX token. The company also worked with Monaco-based entrepreneur Alistair Milne to allow certain verified, non-U.S. Bitfinex users to convert BFX tokens to equity through a newly created BFX Trust.

Since the creation of those two vehicles, a significant number of large Bitfinex token holders has elected to convert tokens into shares. Through the month of October, in excess of 20 million BFX tokens have been exchanged for shares of iFinex; all tokens exchanged for shares have been destroyed by Bitfinex. As of 12 o'clock noon EDT on October 10, 2016, a total of 48,205,714 BFX tokens were issued and outstanding.

Special Recovery Tokens

As a further reward for BFX token holders converting to equity, Bitfinex created a tradable Recovery Right Token (RRT) to compensate victims. In the event of any recovery of the bitcoins stolen from Bitfinex, the first priority will be to use any recovery amounts to repay the then-outstanding or unconverted BFX tokens. If there are any excess recovered amounts after all outstanding BFX tokens have been redeemed at full face value, the recovered funds will be distributed to RRT holders.

Management laid out a subscription schedule that rewards those who committed to conversion early. Subscriptions received on or before October 7, 2016 were provided with one RRT for each BFX token converted into shares of iFinex. Those subscribing on or after October 8, 2016 but before November 1, 2016 will be entitled to one-half an RRT for each BFX token converted into shares. Subscriptions received after October 31, 2016 up to and including November 30, 2016 will receive one-quarter of an RRT per BFX token converted to shares. After November 30, 2016, no further RRTs will be offered.

"We are thrilled to welcome our new shareholders to the Bitfinex community of interest," Potter said. "It is our intention to continue to build customer confidence, enhance our new security protocols, and make Bitfinex a strong investment option for our shareholder-partners."