2016 Bitfinex Exchange Heist: the U.S. Seizes About $3.6 Billion of Stolen Bitcoin

On Tuesday morning, The U.S Department of Justice announced the seizure of the $3.6 Billion of bitcoin that were stolen from crypto exchange Bitfinex in 2016 and moved to the hacker’s wallet. The officials stated that the hackers are scheduled to make their initial appearances in federal court later in the day.

Stolen Funds on the Move

Bitfinex was hacked on August 2, 2016, with the hackers exploiting a security breach and making away with a total of 119,756 Bitcoin. The stolen funds were worth $71.8 million at the time. It was one of the biggest exploits in the history of BTC hacks. It also resulted in the price of the benchmark cryptocurrency plummeting by as much as 20%, moving from $600 to $400.

The Suspect’s Arrest

In August 2020, hackers moved 473.3 Bitcoin, worth $5.7 million. Then, another 5,000 Bitcoin, worth $100 million, were transferred in November. As part of the seizure operation, authorities detained a New York couple on allegations they planned to launder the digital goods. In a statement, Deputy Attorney General Lisa Monaco said that the move marks the agency’s largest financial seizure ever. Ilya Lichtenstein, 34, and his wife, Heather Morgan, 31, were arrested and scheduled to make an initial appearance in federal court later the same day. Lichtenstein’s and Morgan’s legal representation wasn’t immediately clear. Authorities accuse the pair of trying to launder the proceeds of 119,754 bitcoin stolen from Bitfinex‘s platform after a hacker breached Bitfinex’s systems and initiated more than 2,000 unauthorized transactions. Prosecutors allege that the transactions sent the stolen bitcoin to Lichtenstein’s digital wallet. Moreover, the officials said they could seize more than 94,000 bitcoin, which were valued at around $3.6 billion at the time of the seizure. In all, the total stolen bitcoin is presently valued at approximately $4.5 billion, according to the agency.

“Today, federal law enforcement demonstrates once again that we can follow money through the blockchain, and that we will not allow cryptocurrency to be a safe haven for money laundering or a zone of lawlessness within our financial system,” Assistant Attorney General Kenneth Polite Jr. said in a statement.

Imminent Charges for the Bitfinex Hack Suspects

The pair is charged with conspiracy to commit money laundering, which attracts a maximum sentence of 20 years in prison, and conspiracy to defraud the United States, which carries five years in prison. The move is not the first time hackers have moved a portion of the stolen funds. The last such episode occurred in May 2021, when 12,241 Bitcoin worth $774 million were transferred to an unknown wallet on the same day Coinbase went public via a direct listing on the Nasdaq. Back then, the largest single transaction amounted to 1,241.7 Bitcoin (roughly $78 million), according to WhaleAlert. In recent months, crypto platforms have faced several hacks and scams. According to the statistics, scammers took home a record $14 billion in cryptocurrency in 2021, according to blockchain analytics firm Chainalysis. Most recently, Wormhole, one of the most famous bridges linking the Ethereum and Solana blockchains, lost about $320 million in an apparent hack earlier this month.