Key Points
- U.S. government documents suggest Bitfinex could be the only eligible recipient for restitution following the 2016 Bitcoin theft.
- The restitution efforts are likely to concentrate solely on Bitfinex, which has been proactive in recovering the stolen assets.
The U.S. government has recently confirmed that Bitfinex may be the only entity entitled to receive restitution in relation to the infamous 2016 Bitcoin (BTC) hack. This cyberattack resulted in the loss of approximately 120,000 Bitcoin, which is now worth around $7.4 billion.
The U.S. Government’s Stand
The U.S. Attorney for the District of Columbia has stated in court documents that they are not aware of any individual who qualifies as a victim under the Crime Victims’ Rights Act or for restitution under the Mandatory Victims Restitution Act, except perhaps Bitfinex. This statement implies that Bitfinex is the main party affected by the cyberattack, leaving individual account holders without any avenue to claim against the seized assets.
The document further reads, “According to information provided by counsel for iFinex, iFinex believes that it is the sole victim with sustained financial losses from the hack.” This suggests that the restitution efforts will be directed purely towards Bitfinex. Following this news, the exchange’s LEO token saw a significant increase of over 50% to over $8.
Details of the 2016 Bitfinex Hack
The culprits of the hack, Ilya Lichtenstein and Heather Morgan, reportedly infiltrated Bitfinex’s systems and carried out more than 2,000 unauthorized transactions. In response, Bitfinex issued BFX tokens to users as compensation, which could be redeemed or converted into equity shares of its parent company, iFinex. By April 2017, all BFX tokens were redeemed, highlighting Bitfinex’s dedication to user recovery.
In February 2022, U.S. authorities seized 94,643 BTC associated with the hack, valued at approximately $3.6 billion at that time. The seized funds, now worth around $5.8 billion, are likely to be returned to Bitfinex. Lichtenstein admitted to laundering $4.5 billion in stolen Bitcoin from the 2016 Bitfinex hack. Despite doubts about the feasibility of such a crime, blockchain records linked Bitfinex and Lichtenstein’s wallet.