$9 Billion in Bitcoin to be Returned
A U.S. federal court has ruled that 94,643 bitcoins seized after the 2016 Bitfinex hack will be returned to the cryptocurrency exchange as part of a voluntary return agreement tied to the convicted person’s plea deal.
Bitfinex users do not meet the criteria of “victims” and therefore have no rights to these funds.
Bitfinex’s long-awaited redemption
this Decide The case is based on an October filing in which convicted individuals Heather Morgan and Ilya Lichtenstein, as well as Bitfinex parent company iFinex, admitted Exchanges were the only victims of the theft.
Currently, the U.S. government holds the seized Bitcoin. In January 2025, the court ruled that Bitfinex and its users did not qualify as “victims” under the Mandatory Victims Compensation Act.
However, the judge approved a voluntary restitution agreement through a plea deal. The agreement ensures that exchanges can recycle Assets related to hacking attacks.
“The U.S. government says Bitcoin stolen in 2016 should be returned to Bitfinex. In August 2016, hackers laundered 119,754 Bitcoins, worth $71 million at the time. Now worth $11 billion. Clear ruling on property rights for cryptocurrencies in the U.S. Be recognized. FTX customers should be treated the same.” explain Popular FTX creditor Sunil.
The return process includes all assets directly related to the 2016 Bitfinex hack. funds Clean using complex methods A separate forfeiture proceeding will take place.
Additionally, Bitfinex account holders and other parties may challenge the indemnification provisions. They can also make a claim for the recovered funds. The deadline to submit objections is January 28, 2025.
The Department of Justice has also established a mechanism for individuals to identify themselves as affected parties and file claims.
Comprehensive recovery plan
Bitfinex confirmed plans to redeem remaining recovery rights tokens issued to users following the 2016 hack. These tokens were introduced to compensate affected customers by distributing recovered assets.
The exchange previously announced in 2022 that 80% of the recovered funds would be used to buy back and destroy outstanding UNUS SED LEO tokens. This is a debt token created after a hack to offset customer losses.
These token buybacks are expected to take place within 18 months. The ultimate goal is to eliminate all LEO tokens from circulation. According to the latest developments, the LEO token has gained nearly 4% in the past 24 hours.
Heather Morgan and Ilya Lichtenstein Convicted of conspiracy to commit money laundering and fraud.
Morgan has advised businesses on preventing cybercrime Sentenced to 18 months in prison. at the same time, Lichtenstein sentenced to five years in prison.
The recovery of the additional 25,000 Bitcoins remains more complicated. Prosecutors said the funds were laundered using advanced methods such as Leather chain transactionnon-compliant virtual currency exchanges, darknet marketand blender.
Due to these money laundering activities, these coins cannot be classified as the exact property stolen during the Bitfinex hack. They will therefore be dealt with through ancillary confiscation proceedings.
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