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Crypto Exchange Bitfinex has announced that it has recovered some of the stolen assets from the 2016 Bitcoin hack but stated that a considerable number of assets are still yet to be recovered.
The exchange stated in a press release that it had received the assets in question from the United States Department of Homeland Security.
Tip Of The Iceberg
According to the announcement, the exchange revealed that it had managed to recover $312,219 in cash and 6.9 in Bitcoin Cash (BCH) worth around $1951 at today’s prices. The assets, stolen during the 2016 hack, were returned by the United States Department of Homeland Security. US authorities seized control of the funds in 2022 after arresting two individuals in connection with the Bitfinex hack. The exchange has been working with authorities to recover the assets stolen during the hack and return them to customers.
Bitfinex stated in its blog post that the United States government was continuing to make progress in prosecuting the individuals involved with the breach. The United States Customs and Border Protection agency conducted the seizure of the recovered assets. This agency is the law enforcement agency of the US Department of Homeland Security. Paolo Ardoino, the Chief Technology Officer at Bitfinex, thanked the authorities, stating,
“We are extremely pleased to be able to reach another successful milestone in the recovery of assets stolen from Bitfinex in 2016. This specific seizure demonstrates the commitment of law enforcement officials to diligently track all the proceeds of the crime committed against Bitfinex almost seven years ago. We look forward to recovering as much of the stolen bitcoin as we possibly can and redistributing that to holders of the tokens that were issued in response to the hack in 2016.”
The Bitfinex Hack
The Bitfinex hack was one of the biggest hacks to hit crypto at the time, with the hackers managing to steal around 119,756 Bitcoin (BTC) from the exchange thanks to a security breach. At the time, the stolen assets were worth around $71.8 million. However, at current prices, their valuation stands at a staggering $3.6 billion. On several occasions, the hackers had moved the stolen crypto around to launder the funds.
However, US authorities were tracking the assets and managed to arrest the hackers in 2022. The culprits, Ilya Lichtenstein and Heather Morgan were a married couple from New York. Both were subsequently charged with conspiracy to commit money laundering. The arrest also led to the seizure of most of the stolen funds, totaling around $3.6 billion worth of Bitcoin. Deputy Attorney General Lisa O. Monaco stated at the time,
“Today’s arrests, and the department’s largest financial seizure ever, show that cryptocurrency is not a safe haven for criminals. In a futile effort to maintain digital anonymity, the defendants laundered stolen funds through a labyrinth of cryptocurrency transactions; thanks to the meticulous work of law enforcement, the department once again showed how it can and will follow the money, no matter what form it takes.”
Bitfinex had issued a statement as well, expressing gratitude for the recovery, adding,
“We’re pleased that the DOJ has recovered a significant portion of the bitcoin stolen during the 2016 hack. We have been cooperating extensively with DOJ since its investigation of this incident began.”
Redemption Of Stolen Assets
Ardoino had stated that Bitfinex was looking forward to recovering as much of the stolen assets as possible and redistributing them to holders of the Recovery Right Tokens (RRt), which were issued after the hack. The tokens were intended to act as an IOU, and holders could exchange them for cash or iFinex capital stock at a later date. Currently, around 30 million RRT tokens are in circulation, which means that the amount recovered is insufficient to redeem all RRT tokens.
Under Bitfinex’s contractual obligations, RRT token holders were to be redeemed at $1, after which up to 80% of any recovered assets were to be paid to SED, UNUS, and LEO token holders. According to Bitfinex, RRT token holders will have their tokens redeemed pro rata today, based on the size of their RRT holdings, on the 6th of July, 2023.
Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.