2016 Crypto Hack: Bitfinex Gets $312K in Latest Recovery from US

<p>Bitfinex, the
cryptocurrency exchange from whose platform hackers <a href="https://www.financemagnates.com/cryptocurrency/bitfinex-hackers-move-over-3-billion-of-the-stolen-bitcoins/" target="_blank" rel="follow">stole
over 119,000 bitcoins (BTCs)</a> in August 2016, has retrieved about $315,000 in
cash and cryptocurrencies in its latest recovery efforts. The BTCs
stolen from the exchange, worth about $71 million then, are
currently priced at approximately
$3.7 billion. </p><p>Bitfinex
Announces New Recovery </p><p>Bitfinex
announced the latest recovery today (Thursday) in <a href="https://blog.bitfinex.com/media-releases/bitfinex-announces-return-of-seized-property-to-rrt-holders/">a statement</a> on its website, noting that it
obtained the cash and digital asset from the United States Department of
Homeland Security (DHS). The cryptocurrencies were seized by the US Customers and Border
Protection, an enforcement agency of the DHS.</p><p>Previously,
Bitfinex retrieved little amounts of the stolen bitcoins. In 2021, the exchange
in collaboration with the crypto exchange Poloniex <a href="https://www.bitfinex.com/posts/746" target="_blank" rel="follow">obtained 6.5 BTCs</a> worth $305,000 at the time. Earlier in February
2019, Bitfinex also <a href="https://medium.com/bitfinex/bitcoins-returned-to-bitfinex-by-u-s-government-51fe84e8bb12" target="_blank" rel="follow">reclaimed 28 BTCs</a> worth over $107,000 from the US
government. </p><p>However,
the latest recovery follows the <a href="https://www.justice.gov/opa/pr/two-arrested-alleged-conspiracy-launder-45-billion-stolen-cryptocurrency">seizure of about 94,000
bitcoins</a> worth $3.6
billion by the US Department of Justice in February last year. US prosecutors
seized the digital currency after <a href="https://www.justice.gov/opa/pr/two-arrested-alleged-conspiracy-launder-45-billion-stolen-cryptocurrency" target="_blank" rel="follow">arresting and charging
a couple</a>, Ilya
Lichtenstein and Heather Morgan, for allegedly trying to launder roughly $4.5
billion in cryptocurrency linked to the hack.</p><p>Insufficient
Recovery</p><p>According
to Bitfinex, the newly recovered amount will be distributed to holders
of the Recovery Right Tokens (RRTs), which is a digital
currency it issued to
indebted users after the hack. However, there are currently 30 million RRTs in
circulation, meaning that the amount recovered is not sufficient. </p><p>“Pursuant
to Bitfinex’s contractual commitments, all RRT holders must be redeemed at $1,
following which up to 80 per cent of any remaining recovered assets will be
paid to UNUS SED LEO token holders,” Bitfinex explained. “RRT holders
will have their tokens redeemed pro rata by today, based on the size of their
RRT holdings on July 6, 2023, at 12:00.01 am UTC.”</p><p>Who Is
Responsible for the Hack?</p><p>Meanwhile, the
Organized Crime and Corruption Reporting Project (OCCRP), a global network of
investigative journalists, <a href="https://www.financemagnates.com/cryptocurrency/2016-crypto-hack-bitfinex-hid-a-report-that-flagged-security-flaws-occrp/" target="_blank" rel="follow">recently reported</a> that Bitfinex never made public
a confidential report that found its security lapses responsible for the 2016
hack. OCCRP said the crypto exchange failed to execute operational, financial and
technological controls recommended by its digital security partner Bitgo.</p><p>However, <a href="https://financemagnates.com/" target="_blank" rel="follow">Finance Magnates</a> reported that Bitfinex in its
response said the “assertions made by the OCCRP are factually incorrect.” OCCPR
also quoted Bitfinex as saying there was “evidence of negligence…on the part of
other counterparties that led to the hack.”

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This article was written by Solomon Oladipupo at www.financemagnates.com.