- Bitfinex deemed ‘sole victim’ eligible for recovery of $7.4 billion Bitcoin hack
- New US government filing suggests Bitfinex may be the only entity eligible for restitution from the 2016 hack
- Bitfinex’s LEO token jumped 14% to $6.85 following the release of the documents
Bitfinex may be the only entity eligible for restitution related to the 2016 hack that resulted in the theft of 120,000 BTC. This development streamlines efforts to return the stolen funds to the exchange.
Background on the 2016 Bitfinex Hack
In 2016, hackers exploited vulnerabilities in Bitfinex’s systems, stealing around 120,000 BTC valued at $72 million at the time. This amounted to about 0.75% of all Bitcoin in circulation.
To handle the losses, Bitfinex reduced all customer balances by 36% and issued BFX tokens as compensation. By April 2017, Bitfinex had redeemed all outstanding BFX tokens, allowing customers to recover their funds.
U.S. Government Filing Positions Bitfinex as Sole Victim
A recent filing suggests Bitfinex may be the only eligible victim under the Crime Victims Rights Act (CVRA) and the Mandatory Victims Restitution Act (MVRA).
The government states it is “not aware of any person who qualifies as a victim under the CVRA or for restitution under the MVRA beyond perhaps Bitfinex.”
Since Bitfinex already compensated users, this simplifies the recovery process by focusing on returning assets to the exchange.
Impact on Recovery Efforts and LEO Token
With a clear path forward, efforts can concentrate on restoring funds to Bitfinex. This may expedite the legal procedures required to release the seized assets.
Bitfinex’s LEO token jumped 14% on the news, as the exchange has contractual obligations to compensate LEO holders using recovered funds.
While significant challenges remain, Bitfinex has made major progress since the 2016 hack. This ruling marks another milestone, bringing the exchange closer to full restitution.
Conclusion
The Bitfinex hack was one of the largest crypto exchange breaches ever. Despite initial struggles, Bitfinex took steps to reimburse customers and preserve operations.
With users made whole and Bitfinex deemed the sole victim, the stage is set to return the stolen Bitcoin. Though legal complexities persist, this revelation is a major step toward resolution.
