In 2016, around 120,000 Bitcoin (BTC) were stolen as a result of a hack at the crypto exchange Bitfinex. Now, the US judiciary has been able to seize a good 94,000 of these Bitcoin, worth around $3.6 billion. What happens next?
In 2016, the crypto scene was startled by one of the biggest hacks of all time: the crypto exchange Bitfinex lost nearly 120,000 Bitcoin (BTC), and year after year, hopes faded that the loot would resurface. Last week, however, the U.S. Department of Justice reported two arrests in connection with the Bitfinex hack. A married couple had been arrested for organizing money laundering with the Bitcoin from the Bitfinex hack. Still, 96,000 Bitcoin could be seized, with a current value of about $3.6 billion. Can the Bitfinex victims of 2016 now hope for compensation?
Bitfinex itself takes the position in a hasty press release that the Bitcoin in question should be returned to Bitfinex. If this happened, 80 percent of it would be used to buy back and destroy the Bitfinex token LEO. This announcement of an indirect compensation program caused the price curve of LEO to shoot up in a flash by about 80 percent to a new all-time high and LEO is currently still trading at a record level of just under 6 US dollars.
But observers and stakeholders doubt that Bitfinex is entitled to the 96,000 bitcoin or could get it. This is because the history of Bitfinex has been repeatedly accompanied by scandals and legal problems, including in connection with frozen capital and suspicious loans by the closely related company behind the Stablecoin Tether (USDT). In addition, Bitfinex had deliberately avoided identity verification for customers (KYC) for a long time and would probably be very difficult to track down who exactly was affected by the hack.
On the Twitter account Bitfinexed, information about Bitfinex is collected and disseminated. The current opinion seems to be that Bitfinex should at best be compensated with money at the value of Bitcoin in 2016. The remaining BTC would then go directly to victims of the hack, it is hoped. Incidentally, declarations to waive legal action that Bitfinex victims had signed earlier would probably be void.
But the scenarios all do the math without the US Department of Justice. That’s where the private keys to 96,000 Bitcoin are now stored, and those responsible remain silent. It is considered certain that the U.S. government will keep at least part of the seized loot for this purpose, in order to have outstanding taxes from Bitfinex and the costs of the investigative work reimbursed. Due to Bitfinex’s windy history, lawyers also find it hard to imagine that the Department of Justice will actually hand over compensation issues to Bitfinex and with it Bitcoin worth billions.
Conclusion: Many unanswered questions about the Bitfinex hack
The couple arrested for money laundering face more than 20 years in prison, the ministry made clear in its statement. Whether the defendants were really behind the hack themselves is completely open. For the time being, it seems just as open whether Bitfinex victims can hope for transparent compensation. Covetousness on the part of Bitfinex and the authorities is likely to stand in the way of quick decisions. Thus, the Bitfinex hack is experiencing further chapters in its already spectacular story.
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