The U.S. government has announced that the Bitcoin seized after the 2016 Bitfinex hack should be wired back to its rightful owners who fell victim to the attack. The value of the recovered assets has appreciated by 16,618.31% to $11.97 billion from $72 million at the time of the hack. As crypto investors prepare for an eventful year under Trump’s incoming administration, the U.S. government has given a glimmer of hope to victims who lost their Bitcoin holdings in August 2016 from a hack on the Bitfinex crypto exchange. The U.S. government announced that the funds seized from the hack’s recovery operation should be reimbursed to victims through “in-kind” restitution. U.S. court rules that funds from Bitfinex hack must be returned to the exchange As expected *GOVT SAYS SEIZED BITCOIN FROM 2016 BITFINEX HACK SHOULD BE RETURNED IN-KIND Do they just ask Paolo for the addy? https://t.co/8iwx6J1XR6 pic.twitter.com/ndNd1UrdWG — db (@tier10k) January 15, 2025 According to an official document circulating online, a US court ordered that the US government should return the funds seized from the Bitfinex crypto hack back to the exchange. The court also ordered the U.S. government to notify all victims of the hack. The court also ruled that the government should post a link on the Department of Justice website directing potential victims to the case’s specific website where all vital information will be relayed. The U.S. Attorney’s Office for the District of Columbia filed a legal motion in October last year where it identified the Bitfinex crypto exchange as the only entity eligible for restitution after the hack. The hack resulted in the loss of 120,000 Bitcoin worth $72 million at the time meaning that each Bitcoin was valued at around $600. The digital assets were recovered and have been in the custody of the government since then. A 2023 report from Chainalysis revealed that FBI, IRS Criminal Investigation, Homeland Security Investigations, and other government agencies initially recovered over 94,000 BTC. Further recovery efforts ran till June 2023 and brought the recovered assets to 108,068 Bitcoin. The recovered digital assets are worth $11.87 billion in today’s Bitcoin prices. This makes asset recovery rank among the top most valuable crypto recoveries in history. The victims literally made 16,618.31% if the government executed the reimbursement process. The U.S. government arrests charges and sentences Bitfinex hack perpetrators The U.S. government arrested and charged two individuals, Ilya Lichtenstein and Heather Rhiannon Morgan, on counts of money laundering conspiracy and conspiracy to defraud the United States as part of the charges related to the 2016 Bitfinex attack. On November 14th, 2024, Ilya Lichtenstein was sentenced to five years in prison for participating in a money laundering conspiracy arising from the hack and theft of approximately 120,000 bitcoins from Bitfinex, a global cryptocurrency exchange. On the other hand, his accomplice and wife Morgan was sentenced to 18 months for helping her husband launder the stolen funds. U.S. Government linked address compromised for $20 million While in government custody, on-chain data from Arkham Intelligence showed something fishy happened. In October last year, about $20 million in digital assets that were believed to be the proceeds of the Bitfinex hack were moved from the government-controlled wallet in what appeared to be suspicious activity. The funds were moved into a relatively new wallet at the time that was five days old. From there, the wallet owners moved the stolen funds through various blockchain accounts in what seemed like an attempt to conceal the funds’ source. Some funds found their way into instant exchanges that derive their liquidity from Binance and are typically used for money laundering activities. The incident was not officially reported and the reason for the transactions remained unknown. The event occurred in 24 hours and the majority of the funds were returned to the government-controlled wallet. Theories suggest that the incident originated from compromised keys following the speed at which the recovery process was accomplished. From Zero to Web3 Pro: Your 90-Day Career Launch Plan
