Crypto

DOJ Orders $9 Billion in Recovered Bitcoin to Be Returned to Bitfinex

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Crypto Hack

The U.S. Department of Justice (DOJ) has stated that over $9 billion in Bitcoin recovered from the 2016 Bitfinex hack should be returned to the exchange, as outlined in court filings made Tuesday.

The 2016 Bitfinex Hack

In 2016, hackers stole nearly 120,000 Bitcoin—worth approximately $12 billion today—from Bitfinex.

While over $9 billion has been recovered, a portion remains inaccessible due to the complexity of laundering transactions.

The DOJ determined there are no specific victims in the case, as Bitfinex “generalized” the losses across its customer base.

The exchange reimbursed users through a repayment program involving tokens redeemable for cash or company shares.

Convictions and Sentencing

Ilya Lichtenstein and his wife, Heather “Razzlekhan” Morgan, were convicted for their roles in laundering the stolen funds.

Lichtenstein received a 60-month prison sentence, while Morgan, known for her rap career, was sentenced to 18 months.

Security Flaws and Laundering Techniques

The hack exploited vulnerabilities in Bitfinex’s multi-signature wallet security. The DOJ revealed that Lichtenstein and Morgan used sophisticated laundering techniques, including crypto mixers, to obscure the funds’ origins.

Returning the Bitcoin

The DOJ has approved the return of 94,643 Bitcoin to Bitfinex, valued at $9.3 billion at current prices. However, a “third-party ancillary forfeiture proceeding” is ongoing to address unrecovered assets.

Bitfinex’s Response

Bitfinex claims it has made customers whole through its reimbursement program, though some users have disputed this, citing Bitcoin’s significant value increase since the hack.

Cultural Twist

Despite her impending prison sentence, Morgan continues to release music. Earlier this month, she debuted a single titled “Razzlekhan vs. The United States,” describing it as a “misfits’ anthem.”

Written by
Sazid Kabir

I've loved music and writing all my life. That's why I started this blog. In my spare time, I make music and run this blog for fellow music fans.

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