Bitfinex Receives Payout From 2016 Hack; Customers to be Recompensated
Bitfinex has reclaimed a portion of the funds lost in the 2016 security incident, thanks to a collaborative effort with U.S. law enforcement agencies.
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Bitfinex, a leading digital currency exchange platform, has reported that it has reclaimed a portion of the funds lost in the 2016 security incident. The U.S. Department of Homeland Security (DHS) returned $312,219.71 in cash and 6.917 Bitcoin Cash (BCH) to the exchange as part of this ongoing recovery process.
The seizure was accomplished through the cooperation of U.S. Customs and Border Protection, a DHS agency, committting to helping resolve the Bitfinex hack and catch the culprits.
— Paolo Ardoino 🍐 (@paoloardoino) July 6, 2023
Bitfinex’s chief technology officer, Paolo Ardoino, voiced appreciation and contentment for the progress, stating in the press release, “This specific seizure demonstrates the commitment of law enforcement officials to diligently track all the proceeds of the crime committed against Bitfinex almost seven years ago. We look forward to recovering as much of the stolen bitcoin as we possibly can and redistributing that to holders of the tokens that were issued in response to the hack in 2016.”
In response to the security breach five years ago, Bitfinex introduced Recovery Right Tokens (RRTs) to recompensate affected users. The newly reclaimed funds will be directed toward redeeming these tokens.
However, the funds currently recovered do not suffice to redeem all 30 million RRTs that are in circulation. Bitfinex’s contract stipulates that all RRT holders are to be redeemed at $1. Therefore, up to 80% of any surplus of the recovered assets will be distributed to the holders of UNUS SED LEO tokens.
Bitfinex will start the process of redeeming RRT tokens, with the distribution determined proportionately based on each holder’s RRTs as of 12:00.01 am UTC, July 6, 2023.
Bitfinex was hacked in 2016, stealing about $72 million in Bitcoin. Throughout the years, government agencies and blockchain sleuths would track the coins, such as 28 BTC in 2019, 2470 BTC in October 2020, and even following 120,000 BTC around the blockchain as the on-chain records tracked the Bitfinex Bitcoin from the beginning in 2016.
In 2022, the Department of Justice made a breakthrough after arresting and charging Ilya Lichtenstein and Heather Morgan for their possible involvement in the 2016 Bitfinex hack. However, they have yet to be officially charged with the theft directly related to the Bitfinex breach, with some speculating that they are not connected.
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