US Department of Homeland Security Returns Stolen Funds to Bitfinex

9:27 pm
July 6, 2023

In a significant development, the US Department of Homeland Security has returned a portion of the funds stolen from cryptocurrency exchange Bitfinex during a hack in August 2016. The funds were intercepted by the Department of Homeland Security after the arrest of two individuals suspected of carrying out the hack.

The funds returned to Bitfinex included $312,219.71 in cash and 6.917 Bitcoin Cash (BCH).

The Bitfinex 2016 Hack

The hack in 2016 was one of the largest in the history of the cryptocurrency industry. Bitfinex lost approximately 119,756 Bitcoin (BTC) due to a security flaw, valued at $71.8 million at the time. With today’s market price, the stolen BTC is estimated to be worth over $3 billion.

Following the hack, the hackers attempted to launder the stolen cryptocurrencies by moving them around.

In February 2022, a married couple was arrested by US authorities and charged with conspiracy to commit money laundering in connection with the Bitfinex hack. As a result of the arrest, cryptocurrencies worth $3.6 billion were recovered, enabling the US government to possess the most valuable BTC wallet.

Distribution of the Recovered Funds

Paolo Ardoino, Bitfinex’s Chief Technology Officer, expressed gratitude for the recovery of part of the stolen funds and stated, “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 victims of the Bitfinex hack were issued Recovery Right Tokens (RTTs), which function as IOUs. These tokens can be exchanged for cash or iFinex capital stock in the future. While there were 30 million RTTs in circulation, the funds recovered so far are insufficient to fulfill all redemption requests.

FAQ

What is Bitfinex?

Bitfinex is a cryptocurrency exchange that allows users to buy, sell, and trade a variety of digital assets.

What happened in the Bitfinex hack of 2016?

In August 2016, Bitfinex experienced a major hack in which approximately 119,756 Bitcoin (BTC) were stolen due to a security flaw, valued at $71.8 million at the time.

How much has been recovered from the hack?

The US Department of Homeland Security returned $312,219.71 in cash and 6.917 Bitcoin Cash (BCH) to Bitfinex as part of the recovered funds.

What are Recovery Right Tokens (RTTs)?

Recovery Right Tokens (RTTs) were issued to the victims of the Bitfinex hack as an IOU. These tokens can be exchanged for cash or iFinex capital stock in the future.

Are the recovered funds enough to fulfill all redemption requests?

No, the funds recovered so far are not sufficient to meet all the redemption requests from Bitfinex hack victims.

Is the US government now the holder of the most valuable BTC wallet?

Yes, as a result of the arrest and recovery of stolen cryptocurrencies, the US government currently possesses the wealthiest Bitcoin (BTC) wallet.

What is the current worth of the stolen BTC?

The stolen BTC from the Bitfinex hack, based on today’s market price, is worth more than $3 billion.


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