Bitfinex could be ‘sole victim’ of 2016 hack, US government says

A U.S. government filing indicates Bitfinex could be the sole entity eligible for restitution from the massive 2016 Bitcoin theft.

The filing by the U.S. government has confirmed that Bitfinex could be the sole victim eligible for restitution concerning the notorious 2016 hack that resulted in the theft of approximately 120,000 Bitcoin (BTC), now valued at $7.4 billion.

According to the court documents, the U.S. Attorney for the District of Columbia stated, “The government is not aware of any person who qualifies as a victim under the Crime Victims’ Rights Act or for restitution under the Mandatory Victims Restitution Act, beyond perhaps Bitfinex.” 

This statement puts Bitfinex as the primary entity affected by the cyberattack, which has left individual account holders without recourse for claims against the seized assets. 

“According to information provided by counsel for iFinex, iFinex believes that it is the sole
victim with sustained financial losses from the hack,” the document read.

The filing indicates that restitution efforts will likely focus solely on Bitfinex, which has already engaged with law enforcement to recover stolen assets.

Following this news, the exchange’s LEO (LEO) token jumped over 50% to over $8.

The 2016 Bitfinex hack 

The hackers — Ilya Lichtenstein and Heather Morgan — reportedly infiltrated Bitfinex’s systems and executed over 2,000 unauthorized transactions.

Following the hack, the exchange compensated users with BFX tokens, allowing them to redeem or convert these into equity shares of its parent company, iFinex. By April 2017, all BFX tokens had been redeemed, demonstrating Bitfinex’s commitment 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. These funds are now worth around $5.8 billion and are poised for potential return to Bitfinex.

Ilya Lichtenstein confessed to laundering $4.5 billion in stolen Bitcoin from the 2016 Bitfinex hack. Despite skepticism about the ability to execute such a crime, blockchain records linked Bitfinex and Lichtenstein’s wallet.