DOJ Says $9 Billion in Bitcoin Stolen in 2016 Hack Should Be Returned to Bitfinex

Billions of dollars worth of Bitcoin stolen from crypto exchange Bitfinex in a 2016 hack must be returned to the platform, the Justice Department said.

The US government wrote this in court documents filed on Tuesday said that the recovered coins from the theft should be returned to the exchange, as there are no “victims” in the case.

Hackers stole nearly 120,000 Bitcoin (worth nearly $12 billion today) and other digital tokens from the exchange during the hack. More than $9 billion of this has been recovered and should be returned to Bitfinex, according to the Fed.

Last year, Ilya Lichtenstein was sentenced to 60 months in prison for money laundering after being convicted of stealing the coins. His wife, rapper and social media personality Heather “Razzlekhan” Morgan, was convicted separately of helping launder the money, and sentenced to 18 months for the crime.

Bitfinex the losses ‘generalized’ for all customers, sharing the impact of the theft, and launched a refund program that included reimbursing them with tokens that could be exchanged for US dollars or for shares in the company. The exchange has said it believes customers have been healed in the process, although some customers have pushed back on that claim — especially given Bitcoin’s rising value in recent years.

However, in the eyes of the US government, there are no specific victims.

“For the foregoing reasons, there is no ‘victim’ for the specific offenses in this proceeding,” the filing reads.

It added that not all the cryptocurrencies could be recovered due to “the complexity of the money laundering transactions” and that “an additional third-party forfeiture proceeding” took place to deal with those assets.

A total of 94,643 Bitcoin will be returned to Bitfinex. That’s $9.3 billion worth of ‘digital gold’ at current prices.

Hackers got their hands on the Bitfinex crypto due to a flaw in the exchange’s security surrounding multi-signature wallets. Lichtenstein and Morgan then used sophisticated money laundering techniques to cover their tracks, the Department of Justice said last year, mainly using crypto mixing services.

Morgan, who is due to report to prison this month, hasn’t let the prison sentence deter her from her rap career: Earlier this month, the musician released a music video titled “Razzlekhan vs. The United States” — and even narrated Declutter that the song was dedicated to “misfits” like herself.

Edited by Andrew Hayward

Editor’s note: This story was updated after publication to correct the headline. More than $9 billion in Bitcoin has been recovered and should be returned to Bitfinex, according to the DOJ.