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

A US government filing shows Bitfinex may be the only entity eligible for compensation for the massive 2016 Bitcoin theft.

Bitfinex may be the only victim entitled to compensation in the infamous 2016 hack that resulted in the theft of approximately 120,000 Bitcoins (BTC), currently worth $7.4 billion, the US government has confirmed in a filing.

According to court documents, the U.S. Attorney for the District of Columbia said: “The government is not aware of any person, other than Bitfinex, who qualifies as a victim under the Crime Victims Rights Act or who is seeking restitution under the Compensation for Compensation Act. .”

This disclosure reveals Bitfinex as the primary entity affected by the cyberattack and deprives individual account holders of the ability to make claims against the seized assets.

“Based on information provided by iFinex advisor, iFinex believes this is the only one.
“A victim who has suffered sustained financial loss due to hacking,” the document read.

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

Following this news, the stock exchange’s LEO (LEO) token increased by over 50%, reaching over $8.

2016 Bitfinex hack

Hackers (Ilya Lichtenstein and Heather Morgan) reportedly infiltrated Bitfinex’s systems and made over 2,000 unauthorized transactions.

Following the attack, the exchange paid users BFX tokens, allowing them to redeem or convert them into 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, US authorities seized 94,643 BTC, worth approximately $3.6 billion at the time, in connection with the attack. These funds are currently worth approximately $5.8 billion and are poised to provide potential returns to Bitfinex.

Ilya Lichtenstein admitted to laundering $4.5 billion worth of Bitcoin stolen from the 2016 Bitfinex hack. Despite doubts that such a crime could be carried out, blockchain records linked Bitfinex and Lichtenstein’s wallet.