U.S. Government Seizes Bitcoin Worth a Record $3.6B Connected to the 2016 Bitfinex Hack

On August 2, 2016, Bitfinex – one of the largest cryptocurrency exchanges in the world – was hacked.  In less than 2 hours, approximately 120,000 Bitcoins were stolen from Bitfinex and spread across 2,075 addresses under control of the hacker. 

Today, law enforcement made the arrest of Ilya Lichtenstein and his wife, Heather Morgan in connection with the hack in New York, NY.

Thus far, 94,643 BTC worth approximately $3.6B have been recovered by a joint effort between IRS-CI, FBI and HSI in connection with the hack. Congratulations to law enforcement agencies on this successful outcome.

From the complaint, it is clear that the permanence of the blockchain contributed significantly to the recovery of assets. The blockchain shows a permanent record of the funds stolen from Bitfinex to the hackers’ wallet, and the transfer to a US government-controlled address. This transparency shows very clearly that the funds taken from the victim, Bitfinex, are now in the possession of the US government.

This marks the largest recovery of assets from a theft in history. As hackers continue to target businesses and individuals, this case demonstrates how the permanent record left by the blockchain can assist in recovery.  Law enforcement now has the technology and techniques to keep the industry safe.