Bitcoin on a stack of coins with Bitfinex logo on a laptop screen. Source: 24K-Production - stock.adobe.com

Key Takeaways:

Seized Funds to Bitfinex: The U.S. government has filed a motion to return 94,643 BTC, along with BCH, BSV, and BTG, seized from the 2016 Bitfinex hack, to the exchange.
Hack Aftermath and Compensation: Bitfinex issued BFX tokens to compensate users after socializing losses and successfully redeemed all tokens within eight months.
Victim Claims Process: A website has been launched to allow individuals to submit claims, with a deadline for impact statements set for Nov. 13, 2024.

The U.S. government has filed a motion recommending the return of cryptocurrency linked to the 2016 Bitfinex hack to the exchange.

This includes 94,643 BTC and other cryptocurrencies from subsequent forks, valued at over $11.8 billion today.

💥BREAKING: US Government says 120,000 Bitcoin stolen in 2016 Bitfinex hack should be returned to Bitfinex. pic.twitter.com/VecSFvNmIF
— Bitcoin Archive (@BTC_Archive) January 15, 2025

The funds were stolen during a hack orchestrated by Ilya Lichtenstein and Heather Morgan, who were arrested and convicted in 2022.

Following the hack, Bitfinex enacted a recovery plan, halting withdrawals and imposing a 36% loss across user accounts.

To compensate, the exchange issued BFX Tokens, which users could redeem for equity in iFinex, its parent company, or fiat currency.

Bitfinex fully redeemed these tokens within eight months, reimbursing affected users.

The U.S. government’s motion highlights Bitfinex’s successful compensation efforts, asserting that the exchange fulfilled its obligation to victims.

As such, it argues that the seized funds should be returned directly to Bitfinex.

However, the government has also acknowledged that some individuals may still consider themselves victims.

It launched a website to inform potential claimants of their rights to contest the forfeiture and submit impact statements by November 13, 2024.

Valid claims will be reviewed on a case-by-case basis in ongoing legal proceedings, though Bitfinex remains the primary beneficiary of the returned funds.