U.S. Prosecutors Seek Court Approval for Return of 94,643 Bitcoins from BitFinex Hack

• Nearly 80% of stolen 119,754 BTC could soon be returned to Bitfinex.
• 25,000 BTC laundering involves complex processes requiring separate action.
• Bitfinex compensated users with BFX tokens post-2016 hack for losses.

U.S. prosecutors are requesting court approval to return 94,643 stolen bitcoins to the Bitfinex exchange. However, a more complex legal process delays the recovery of the remaining 25,000 BTC. Legal hurdles continue to complicate the case.

Bitfinex Set to Recover Stolen Bitcoin

U.S. prosecutors have filed a motion to return nearly 80% of the stolen 119,754 Bitcoin from the 2016 Bitfinex hack. The recovery of 94,643 Bitcoins from the hacker’s wallet awaits court approval for restitution. Additionally, the government seeks to return Bitcoin Cash, Bitcoin Satoshi Vision and Bitcoin Gold generated through hard forks.

In their legal submission, prosecutors noted that the recovered funds could be returned to Bitfinex directly. The filing requests that the assets be transferred to the exchange once the court authorizes the process. The motion aims to restore Bitfinex after the hack, with the stolen Bitcoins now valued at over $11.8 billion.

However, the remaining 25,000 Bitcoins present a more complex issue which requires a separate forfeiture process to determine the correct recovery procedure. According to prosecutors, these coins were laundered using sophisticated methods, such as mixers and non-compliant exchanges.

Ilya Lichtenstein and Heather Morgan were convicted for their involvement in the hack and subsequent money laundering. Lichtenstein who was sentenced to five years in prison and Morgan who received 18 months, forfeited the stolen cryptocurrency. The two were convicted after they pled guilty to conspiracy to commit money laundering in 2023.

Bitfinex Recovery Plan

Bitfinex implemented a recovery plan after the hack and compensated affected users with BFX tokens. The plan aimed to cover 36% of users’ losses, with BFX tokens which could be converted to iFinex shares. Users redeemed all issued BFX tokens within eight months to fulfill the government’s requirements for victim reimbursement.

The U.S. government noted that the recovery plan could limit the compensation to the hack victims. In October 2024, a filing revealed that Bitfinex would likely be the sole recipient of any reimbursement. The government said that there were potentially thousands of affected account holders who might still seek compensation.

A website has been established to notify victims about the ongoing legal processes and enhance transparency. A deadline to submit impact statements by affected parties was set for November 2024. Victims of the hack were invited to file claims if they believe they are entitled to restitution.

The case has sparked debates on the management of cryptocurrency-related theft and its complex legal implications. As the court proceeds with the claims process, the return of these stolen assets is expected to draw further attention from legal experts and cryptocurrency enthusiasts.