U.S. prosecutors seek court approval to return nearly $10 billion in Bitcoin recovered from the monumental 2016 Bitfinex hack.
Federal prosecutors have announced plans to remit 80% of the 119,754 Bitcoin (BTC) retrieved from the notorious Bitfinex crypto exchange hack back to the platform, according to a recent court filing.
Authorities seized 94,643 BTC from Ilya Lichtenstein, the individual responsible for the 2016 hack, who, along with his partner, engaged in laundering the proceeds. Heather “RazzleKhan” Morgan was also implicated in this scheme.
The seized Bitcoin was extracted from the original wallet used by Lichtenstein, allowing for an “in-kind restitution” to be returned to Bitfinex, as stated by prosecutors. In October, prosecutors contended that Bitfinex may be considered the sole victim, setting the stage for this return under U.S. law.
Challenges in Returning Remaining Bitfinex Bitcoin
The recovery of approximately 25,000 BTC poses a more complex challenge. Prosecutors indicated that Lichtenstein and Morgan deposited portions of the stolen cryptocurrencies into mixers, darknet markets, and other sophisticated platforms, complicating direct restitution.
Due to these laundering attempts, the Department of Justice has proposed a secondary forfeiture process to regain the remaining BTC, although the timeline for this effort remains uncertain.
In total, the duo stole nearly 120,000 BTC from Bitfinex in 2016, a stash now valued at nearly $12 billion. Lichtenstein was arrested in February 2022 and pleaded guilty to money laundering conspiracy charges in 2023.
As a result of his actions, Lichtenstein was sentenced to five years in prison, while Morgan received an 18-month jail term.
