American legal authorities are seeking judicial permission to transfer approximately $10 billion worth of Bitcoin, which they’ve retrieved, back to the courts following the 2016 hack on Bitfinex.
As per court documents, it’s been reported that federal authorities intend to return 80% of the 119,754 Bitcoin seized from the Bitfinex hack directly to the cryptocurrency exchange.
94,643 Bitcoin, obtained through a hack on Bitfinex in 2016 and laundered by Ilya Lichtenstein and his associate Heather “RazzleKhan” Morgan, were confiscated by authorities examining the case.
The Bitcoin stored in Lichtenstein’s initial wallet, which was used during the hack, has been retrieved and could be returned as “compensation in kind,” the prosecutors stated to a federal judge. In October, it was suggested by U.S. attorneys that Bitfinex might be the only victim, thus setting the stage for this reimbursement strategy under American law.
Outstanding Bitfinex Bitcoin is “complicated”
The original Bitcoin amount, around 25,000 BTC, might prove challenging to recover, as it has been transferred to complex digital systems such as crypto tumblers, darknet marketplaces, and advanced technology platforms where it could be hard to trace. In their filing, the prosecutors detailed that Lichtenstein and Morgan had moved parts of the stolen cryptocurrency into these intricate systems.
As a researcher, I’ve discovered that due to these money laundering attempts, the original Bitcoins cannot be restored. However, the Department of Justice has suggested an auxiliary forfeiture procedure to reclaim the residual BTC, but the duration for this process is still uncertain.
In the year 2016, Bitfinex experienced a massive cyber theft, with Lichtenstein and Morgan making off with approximately 120,000 Bitcoin – an amount that currently holds a staggering value of nearly $12 billion. Lichtenstein was apprehended by authorities in February 2022, and later admitted to his involvement in money laundering conspiracies in the year 2023.
Lichtenstein was sentenced to five years in prison, while Morgan is to be jailed for 18 months.
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2025-01-16 17:55