Suspected Hacker Steals $20 Million in Crypto from US Government’s Bitfinex Wallet: Data

A staggering $20 million in cryptocurrency linked to US government addresses has been moved to a new wallet, raising alarms about a possible theft.

The transactions originated from the government-controlled Bitfinex Hack Wallet, which housed some of the funds recovered from the 2016 attack on crypto exchange Bitfinex. This resulted in a loss of almost 120,000 BTC.

Movements of funds considered suspicious

Blockchain security firm Arkham Intelligence was one of the first to flag the suspicious activity, initially blaming government authorities for moving the funds.

The suspected hacker withdrew about $5.4 million worth of crypto from the Aave lending platform, sending it to a new address created just five days earlier. They then followed with another $1.12 million in USDT, and the back-to-back withdrawals were the first by the address in eight months.

However, it was after the wallet started sending the tokens to another address, starting with “0x348”, which was previously linked to money laundering, that Arkham started tracking the movement of the funds, and eventually concluded that the case was indeed an exploit.

Along with the previous withdrawals, the alleged thief also moved an additional $446,000 worth of Ethereum (ETH) and $13.7 million in aUSDC, an interest-bearing version of the USD currency deposited into Aave. The Bitfinex Hack Wallet received millions of cryptocurrencies in particular in 2022, as well as its USDT iteration.

The suspect has moved some of the stolen loot to instant exchanges, platforms that allow users to quickly exchange one cryptocurrency for another without the need for an account or going through a lengthy verification process.

Most blockchain security analysts agreed that the transfers were suspicious, with ZachXBT noting that any funds moved to instant exchanges were “ominous.”

Bitfinex hack details

The Bitfinex hack is one of the biggest in crypto history. The perpetrators, now identified as Ilya Lichtenstein and his wife Heather Morgan, stole 119,754 BTC, worth an estimated $71.8 million at the time.

The two were arrested in February 2022 and later pleaded guilty to money laundering and fraud. At the time of his arrest, the stolen stock had a market value of $4.5 billion.

Lichtenstein received a five-year sentence for his role in the hack and subsequent money laundering activities. The short sentence was a result of his cooperation with authorities in other investigations, including taking the state’s witness stand against Roman Sterlingov, founder of crypto-mingling platform Bitcoin Fog.

Meanwhile, Morgan, also known by her rap stage name “Razzlekhan,” was sentenced to 18 months in prison and is currently free after serving her sentence.

Law enforcement agencies were able to recover about $3.6 billion of Bitcoin stolen in the Bitfinex attack, with some of it returned to the exchange.

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