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Federal Court Orders Massive Return of $9.3B in Bitcoin Stolen From Bitfinex in 2016 Hack
01/16/2025 03:33
Court orders return of $9.3B in bitcoins to Bitfinex, stemming from historic 2016 crypto heist and recovery efforts.
Key Notes
- A US court directed the return of 94,643 bitcoins ($9.3 billion) to Bitfinex from the 2016 hack.
- Hackers stole 119,754 bitcoins in 2016, initially worth $71M, now valued at over $11B.
- Bitfinex users must file objections or claims by January 28 to recovered assets under DOJ's mechanism.
In a landmark decision, a federal court has ordered the return of 94,643 bitcoins—valued at more than $9.3 billion—to cryptocurrency exchange Bitfinex. That massive sum is tied to the infamous 2016 hack, one of the boldest crypto heists in history. The decision stems from plea deals with Ilya Lichtenstein and his wife, Heather Morgan, who orchestrated the theft.
— The Wolf Of All Streets (@scottmelker) January 15, 2025DOJ Orders $9.3B In Recovered Bitcoin From 2016 Hack To Be Returned To Bitfinex
The U.S. DOJ announced that $9.3 billion worth of Bitcoin (94,643 BTC) recovered from the 2016 Bitfinex hack should be returned to the exchange, as there are no identified victims of the theft.… pic.twitter.com/c6EBGqHKhj
The hack originally saw 119,754 bitcoins stolen from Bitfinex customer accounts, a sum worth $71 million in 2016 but now valued at over $11 billion. As part of its response to the breach, Bitfinex slashed account balances by 36% and issued BFX tokens to affected users. These tokens, which could be redeemed for cash or converted into equity, were part of a recovery strategy devised after the crisis.
The saga took a dramatic turn in 2022 when the US Department of Justice cracked encrypted data tying Lichtenstein and Morgan to the theft. Their subsequent guilty pleas for money laundering and hacking paved the way for the recovery of 80% of the stolen bitcoin. This marked the largest-ever asset seizure in DOJ history.
Judge Rules on Bitfinex Restitution — Key Implications
In January 2025, a federal judge ruled that Bitfinex and its users do not qualify as “victims” under the Mandatory Victims Restitution Act. However, the court invoked plea agreements allowing voluntary restitution to the exchange. Bitfinex account holders affected by the hack have until January 28 to file objections or claims to the recovered assets.
Bitfinex reaffirmed its commitment to redeem the remaining Recovery Right Tokens issued in 2016, designed to allocate recovered funds to impacted users. The restitution arrangement accounts for assets linked to the hack, while other laundered funds are being handled separately under ancillary forfeiture proceedings.
“The US government said bitcoin stolen in 2016 should be returned to Bitfinex. The hackers laundered 119,754 BTC in Aug 2016 – $71 million at the time. Now worth $11 billion. Clear ruling that property rights of crypto is recognised in the US. FTX customers should be treated the same,” said FTX creditor Sunil.
This case has spotlighted the complexities of restitution in the cryptocurrency world, where disputes over asset ownership and victim status continue to emerge. Bitfinex’s innovative response in 2016—through tokenized recovery mechanisms—remains a focal point as the court proceedings evolve.
With the final deadline fast approaching, ancillary claims and customer objections will play a pivotal role in determining the ultimate allocation of assets. The DOJ has also opened a mechanism to allow affected parties to identify themselves and submit claims.
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