US Government Seeks to Return Stolen Bitcoin from 2016 Bitfinex Hack

In a latest development, as per a court document filed this week, the U.S. government noted that over 94,000 bitcoin stolen in the 2016 hack of bitfinex bitfinex - Centralised Exchange by Ilya Lichtenstein and Heather Morgan should go back to the exchange. The Officials noted that the 120,000 BTC that was seized in relation to the 2016 Bitfinex hack should be returned as “in-kind restitution.”

For the foregoing reasons, there is no ‘victim’ for the specific offenses of conviction in this proceeding,” the government noted in a filing posted on Tuesday to the U.S. District for the District of Columbia. 

However, the Court has the authority to order voluntary restitution pursuant to the defendants’ plea agreements. Such voluntary restitution should include all of the assets seized from the Bitfinex Hack Wallet and that, pursuant to the plea agreements, those assets should be returned to Bitfinex as in-kind restitution,

it noted.

The Largest Seizure In US DOJ’s History

Previously, a court filing from October stated that Ilya Lichtenstein and Heather Morgan (also known as “Razzlekhan”), along with Bitfinex’s parent company iFinex, assert that the crypto exchange is the sole victim of the 2016 hack.

Lichtenstein and Morgan pleaded guilty in August 2023 to conspiring to launder 119,754 bitcoin, which had been stolen during the Bitfinex hack in 2016. At the time of the hack, the stolen bitcoin was valued at approximately $71 million. However, the 2022 seizure of bitcoin from the couple’s devices amounted to nearly $4 billion, making it the largest asset seizure in U.S. Department of Justice (DOJ) history.

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The Biggest Crypto Thefts

In 2016, the attack on Bitfinex was among the biggest cryptocurrency thefts. Almost nine years later, it remains one of the biggest tragedies the industry has faced. Late last year, Ilya Lichtenstein, the person responsible for the attack, had been sentenced for their involvement in the attack.

Notably, the US government is one of the largest holders of Bitcoin in the world. The country holds more than $20 billion worth of the leading cryptocurrency, according to Arkham Intelligence data. Most of those assets were seized from the Silk Road Marketplace.