Bitfinex Set to Reclaim Stolen Bitcoin Following US Restitution Mandate
By: Eliza Bennet
The United States government has mandated the return of 94,000 Bitcoin (BTC) to the crypto exchange Bitfinex following the 2016 hack that resulted in the theft of approximately 120,000 BTC. According to the ruling, these assets, previously seized in relation to the hack, will be returned to the exchange as part of an in-kind restitution process. This decision follows a filing from October 2024, where the US government identified Bitfinex as the sole victim in this case, thereby proceeding with the restitution.
The restitution is intimately linked with the legal proceedings involving Ilya Lichtenstein and Heather Morgan, who were accused of conspiring to launder Bitcoin stolen from the exchange. The duo, who pled guilty in August 2023, were sentenced to prison—Lichtenstein for five years and Morgan for eighteen months—as part of the settlements connected with their guilty pleas. The couple was held responsible for laundering a significant portion of the stolen 119,754 BTC, valued at approximately $71 million at the time of the incident.
Initially, in response to the breach, Bitfinex had deducted 36% from all user balances and issued BFX tokens as compensation, maintaining a 1:1 parity with the US dollar. By mid-2017, all BFX tokens were redeemed as the exchange tried to restore user confidence. Furthermore, as part of ongoing recovery efforts, Bitfinex received $312,219.71 in cash and 6,917 Bitcoin Cash (BCH) from the US Department of Homeland Security in July 2023 to redeem Recovery Right Tokens held by users. In a show of commitment to its user base, up to 80% of any remaining recovered assets will be distributed to UNUS SED LEO token holders over the next eighteen months.
This judicial move underscores the lengths to which US authorities are willing to go to rectify financial crimes involving cryptocurrency, securing Bitfinex’s position as a victim in this scenario. This restitution not only serves as mitigation for the losses incurred by the exchange but ultimately returns faith in the system for current and future investors.
