KEY POINTS
- Four transfers were made Wednesday, with the last one being over 12,000 BTC
- Bitfinex was exploited for $4.5 billion in 2016, with US authorities seizing some $3.6 billion of the stolen funds
- Bitfinex has said the recovered billions should be returned to the crypto exchange
Data from blockchain intelligence showed that the United States government transferred around $922 million worth of Bitcoin from wallets that held funds seized from a multi-billion-dollar exploit of cryptocurrency exchange Bitfinex in 2016. The transfer happened Wednesday, when the world's first decentralized cryptocurrency crossed the $60,000-mark for the first time in more than two years.
The first transfer of one Bitcoin (worth $60,200 during the move), which appears to be a test transfer, was made Wednesday afternoon, as per data from blockchain intelligence firm Arkham Intelligence.
A second transaction was made shortly after, wherein 2,818 BTC worth over $172 million was transferred. On Wednesday night, a third transfer was made for 0.00913758 Bitcoin, worth $559.54.
The fourth and final transaction Wednesday was made around 30 minutes after the third transfer. The U.S. government wallet called "U.S. Government: Bitfinex Hacker Seized Funds" transferred 12,267 BTC worth $748.46 million to another government crypto wallet address.
Movement from the government wallets came a day after Bitfinex exploiter Ilya Lichtenstein appeared in court to provide details about how he hacked Bitfinex in 2016, resulting in $4.5 billion worth of Bitcoin being stolen and laundered.
The U.S. Department of Justice (DOJ) in 2022 alleged that Lichtenstein and his wife, Heather Morgan, also known as rapper Razzlekhan, conspired to launder $4.5 billion in Bitcoin exploited from Bitfinex. The DOJ said over $3.6 billion "linked to that hack" was seized and Lichtenstein and Morgan were arrested.
"Criminals always leave tracks, and today's case is a reminder that the FBI has the tools to follow the digital trail, wherever it may lead," said FBI Deputy Director Paul M. Abbate at the time of the couple's arrests.
The recovery of stolen Bitfinex funds is the largest cryptocurrency seizure in the United States so far. Another massive operation took place in November 2021, when the DOJ announced law enforcement seized approximately over 50,000 Bitcoin, then valued at over $3.36 billion. The funds were "unlawfully obtained" by James Zhong from the Silk Road dark web internet marketplace.
Meanwhile, some victims of the Bitfinex hack have been battling to recover their Bitcoin as the question remains as to who legally owns the pilfered digital assets. Bitfinex has reiterated that the seized funds should be returned to the platform, since the crypto firm believes it has already compensated affected customers fairly by providing them with various non-Bitcoin digital tokens that clients could sell for cash.
Some victims of the exploit believe they should be compensated in Bitcoin. Ultimately, the court will decide how to disperse the recovered funds, U.S. Deputy Attorney General Lisa Monaco told CNBC in 2022.
