Summary:
94,643 bitcoins
almost 80% of stolen funds are set to be returned to Bitfinex
Hackers Ilya Lichtenstein and Heather Morgan faced prison sentences
Remaining 25,000 bitcoins involve a more complex return process
Sophisticated laundering methods complicate restitution
Major Developments in the Bitfinex Hack Case
U.S. prosecutors have recently filed a motion requesting a federal judge to approve the return of 94,643 bitcoins, nearly 80% of the 119,754 bitcoins stolen during the infamous 2016 Bitfinex hack. This significant development could lead to a major restitution for the crypto exchange.
In their filing, prosecutors indicated that these bitcoins, recovered from the original wallet of hacker Ilya Lichtenstein, can be returned to Bitfinex as restitution once the court grants the necessary permission. Additionally, any Bitcoin Cash, Bitcoin Satoshi Vision, and Bitcoin Gold generated through subsequent hard forks will also be included in this restitution.
Sentencing of the Hackers
In a related case, Lichtenstein was sentenced to 5 years in prison after pleading guilty to conspiracy to commit money laundering in 2023. His wife, Heather Morgan, also known by her rap name Razzlekhan, received an 18-month sentence for her involvement in laundering a part of the stolen funds. As part of their plea agreements, both have agreed to forfeit the stolen cryptocurrency.
Complications in Returning Remaining Bitcoins
However, the return of the remaining 25,000 bitcoins will be more complex. Prosecutors pointed out that Lichtenstein and Morgan used a range of sophisticated methods to launder these coins, including:
- Extensive peel chain transactions
- Transactions through non-compliant virtual currency exchanges
- Darknet markets and mixers
- Commingling funds in their personal and business accounts
Due to these complexities, the remaining bitcoins cannot be classified as the specific property lost in the hack. Consequently, they will need to be returned through an ancillary forfeiture proceeding.
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