Bitfinex Initiates Reimbursement Process for 2016 Hack Victims, Restoring Over $300k in Stolen Funds
Bitfinex has announced the return of seized property to Recovery Right Token (RRT) holders. The company received $312,219.71 in cash and 6.917 BCH from the United States Department of Homeland Security (DHS), marking a significant milestone in the recovery of assets stolen from Bitfinex during a security breach in August 2016.
The seizure operation, executed by the U.S. Customs and Border Protection, a law enforcement agency of the DHS, is a testament to the dedication of law enforcement officials in pursuing the perpetrators of the Bitfinex security breach and reclaiming the stolen funds. Bitfinex extends its gratitude to the DHS for their unwavering commitment to recovering assets and restoring them to their rightful owners.
Paolo Ardoino, Chief Technology Officer of Bitfinex, expressed his satisfaction with the latest development, stating, “We are extremely pleased to be able to reach another successful milestone in the recovery of assets stolen from Bitfinex in 2016.” Ardoino emphasized the dedication of law enforcement agencies in tracking down the proceeds of the crime committed against Bitfinex almost seven years ago. He further highlighted the company’s determination to recover as much of the stolen bitcoin as possible and redistribute it to holders of the tokens issued in response to the hack in 2016.
As per Bitfinex’s contractual obligations to token holders, the recovered funds will be utilized to redeem Recovery Right Tokens (RRTs) issued by the company following the security breach. However, it is important to note that the amount recovered is not sufficient to redeem all RRT tokens, considering the current circulation of 30 million RRTs. Following the redemption of all RRT holders at a rate of $1 per token, up to 80 percent of any remaining recovered assets will be distributed to UNUS SED LEO token holders.
The redemption process for RRT holders is set to occur pro rata, effective immediately, based on the size of their RRT holdings as of July 6, 2023, at 12:00.01 am UTC.
Bitfinex remains committed to working closely with relevant law enforcement agencies and leveraging the judicial system to recover the property stolen during the security breach in 2016. The company’s relentless pursuit of justice and the restoration of stolen assets exemplifies its dedication to safeguarding the interests of its users.
Background
The incident dates back to August 2016 when Bitfinex experienced a devastating hack resulting in the theft of approximately 120,000 BTC. At that time, the value of 1 BTC was approximately 420 USD equivalent to around 50 million USD. However, given the surge in Bitcoin’s value, the stolen amount is now estimated at around 3.6 billion USD.
In February 2022, Ilya Lichtenstein and his wife were arrested by U.S. authorities on charges of attempting to launder funds associated with the illegal outflows from Bitfinex. Subsequently, the U.S. Department of Justice seized 94,000 BTC from the couple.
According to affidavits from Internal Revenue Service (IRS) investigators, Lichtenstein and his wife divided the stolen bitcoins into numerous transactions, transferring them to various accounts in their names and companies. They also utilized anonymous currencies during the process.
Heather Morgan, Lichtenstein’s wife, is currently out on bail, while the couple faces potential sentences of up to 20 years in prison if convicted of money laundering and defrauding the U.S. government.
The return of seized assets to Bitfinex and the subsequent redemption of RRT holders’ tokens marks a significant step forward in restoring faith in the cryptocurrency ecosystem and holding perpetrators accountable for their actions.
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