We are pleased to announce the redemption of 2.00% of outstanding BFX tokens. This redemption was applied pro rata to all wallet balances on January 10, 2017, at 23:30:00 UTC. The redemption does not apply to margin long or short positions—only on settled wallet balances. The amount of the redemption is based on a combination of December’s operating results and a reduction in our contingent liability reserves.
After this redemption, there are now 35,712,790 BFX tokens outstanding.
For redemptions in the future, we will be changing our methodology for determining eligible balances. Specifically, in addition to settled wallet balances being subject to redemption, margin positions will also be included with margin long positions receiving the redemptions and shorts paying the redemptions. Redemptions associated with margin positions will be settled to the balances in the margin wallet and will not affect the amount or the base price of the margin position itself.
Since redemptions debit BFX and credit USD, it is possible that a negative BFX balance might be created (while USD is credited) in the margin wallet during subsequent redemptions if there is no BFX collateral. If this happens, the system will handle the negative balance as usual—automatically settling them at the market price. Please note that shorts will see a net reduction in the margin wallet balance, the effect being similar to the situation of being short a stock that pays a dividend.
We continue to press forward on all fronts to expeditiously retire BFX tokens through a variety of initiatives including equity conversion with qualified token holders, raising new capital through equity financing, reinvesting operating profits, and prudent reductions in contingent liability reserves. We look forward to sharing further developments with you in due course.
If you have any questions about redemptions and how we will be handling margin positions in upcoming redemptions, please contact [email protected]