Bitcoin Exchange Bter Unveils Customer Refund Process

As we reported here on BTCFeed a few weeks ago, the Bter Bitcoin exchange – that recently lost over 7,000 Bitcoins due to a security breach – was planning to open their doors to the public again. However, at that point in time it remained unclear as to how Bter would pay back customers affected by this security breach. We have received more detailed information on how this process will work exactly.

The Guide To Refunding Customers

Before we get started, we need to make one thing clear : not all affected users will receive their Bitcoin refunds at the same time. Considering the amount stolen by the person/people responsible for the Bter hack, it will take some time in order to provide enough liquidity to process all refunds. However, Bter has said they will honour all losses and refund every customer accordingly.

Affected users who were holding Bitcoin on the Bter exchange at the time of the security breach will receive an additional form of compensation. Eligible users will receive Bter’s half year’s trading fee in proportion to the amount of BTC they owed at that time. A nice gesture from the Bter team, which will be greatly appreciated by those customers who opt to keep on trading on this Bitcoin exchange platform.  All affected users will also receive one month of 0% trading fees.

In order to separate the lost BTC balance from the current BTC balance in the user account section, Bter has renamed the funds owed to the customer to “BTC_B”. This will remain the reference for outstanding refunds until every single Satoshi has been paid back to affected customers. Looking at this from a bookkeeping point of view, it makes sense for Bter to separate both balances.

Part of the refunds will be coming from the profits generated by the Bter Bitcoin exchange platform. In fact, all of the profits for the foreseeable future will be sued to pay back affected customers. Depending on how much trading volume Bter can generate after being hacked twice in six months, using profits to cover up losses may take far longer than anticipated.

However, that is not the only source of profit revenue for Bter. The company plans to launch other companies later this year, and if there is still outstanding funds to be paid back by that time, profits from these new companies will also be used to pay back affected customers.

Despite being hacked twice in a few months, Bter has managed to secure 1,000 Bitcoin in funding from their partner JUA.COM. This funds, together with other capital injections to be sought by the Bter team, will help in speeding up the customer refund process.

Source : https://bter.com/article/4760