Bitcoin Assets Seized from Bitfinex Hack in 2016 Might be Returned, according to the US Government

The latest reports have shown that the US government has proposed returning the seized Bitcoin assets from the 2016 Bitfinex hack to the rightful owners. Official notes say that for the “forgoing reasons, there is no “victim” for the specific offences” in this proceeding.

The Bitfinex Hack, Explained

Back in 2016, Ilya Lichtenstein from New York used advanced hacking tools to hack into Bitfinex. Once that occurred, Lichtenstein authorized over 2,000 transactions. In doing so, he transferred 119,754 Bitcoin assets from Bitfinex to his own crypto wallet.

Once he did that, Lichtenstein covered his tracks as he deleted the network login credentials and other files that could’ve been used as evidence. According to court documents, he managed to pull off the heist with the help of his wife Heather Morgan. Evidence suggests that Morgan played a key role in laundering the stolen money.

Some of the laundering techniques that were used included setting fake identities, using programs to automate transactions, depositing money into dark web accounts, etc.

At the time when the assets were stolen, their value was around $72 million. Today’s market volatility places the value around $12 billion.

Morgan and Lichtenstein Were Captured and Sentenced to Prison

Both Morgan and Lichtenstein were arrested in February 2022. They pleaded guilty to the crime on August 3, 2023.

One and a half years later, in November 2024, the DoJ set up a special website to collect statements from people who were affected by the hack. The DoJ cited the Crime Victims’ Rights Act and stated that under the act, there aren’t any victims for the offence of conviction.

Back in November, Lichtenstein was also found guilty and was sentenced to 60 months in prison for crimes related to money laundering. Shortly after, Morgan was sentenced to 18 months in prison and thus, the drama with the hack finally settled.