Hackers move some 94K BTC from funds stolen in Bitfinex 2016 hack

abdelaziz Fathi

Another chunk of the 120,000 Bitcoins lost during the cyber-attack towards Bitfinex crypto exchange in 2016 has been mysteriously moved today, sparking fresh speculation over the identity of the hackers behind the theft.

Specifically, Twitter-based crypto transaction tracker Whale-alert.io has posted the evidence of the reallocation of just over 94,000 BTC (equivalent to roughly $3.6 billion at press time). In a series of transfers beginning at Asian hours on Tuesday, the funds moved in 23 total transactions from a wallet that had previously held Bitcoins taken in the Bitfinex hack.

Analysts do not believe that the transactions will have an immediate impact on the market as most crypto exchanges implemented measures to prevent cashing out the stolen coins. However, some analysts believe the hackers may be trying to manipulate the price or spook the market’s short position takers.

The Twitter handle Whale_Alert noted a transfer containing as much as 10,000 BTC this morning, but other transactions continued throughout the day. Bitfinex has reportedly confirmed that the movement has nothing to do with the firm’s processes.

Bitfinex compensated the customers

“So far this morning, 94,643.29 bitcoins ($3.55 billion) have been moved in 23 transactions, from a wallet associated with a theft from Bitfinex in 2016, to a new address. It is unlikely that these funds will be cashed out any time soon. Funds from this hack have been slowly laundered for over five years now and cashing-out large volumes over a short period of time would draw unwanted attention,” blockchain analytics firm Elliptic said.

Bitfinex was hacked in 2016 to the tune of 119,756 BTC, which was worth $72 million at the time of the hack, but is now equivalent to $3.8 billion given the inflation in BTC prices.

In terms of how the hack happened and the identity of hackers themselves, it’s still pretty vague despite indicting two Israeli brothers as partially responsible for the attack. All we know is that Bitfinex’s multi-signature accounts were somehow compromised, and the exchange distributed losses amongst all users to the tune of 36% of their balances. Bitfinex promised customers that they would be reimbursed and granted them tokens called BFX equal to each customer’s exact losses. The token was already redeemed for full repayment.

Despite the efforts of law enforcement agencies, the vast majority of the stolen bitcoins are still missing, but the funds were sent to thousands of unused BTC addresses and remained unmoved for almost three years. After the incident, US authorities were able to recover less than 23 BTC that worth roughly $250,000. Around $100 million worth of in stolen BTC was moved in November 2020 and in April 2021, a further $774 million worth of bitcoins was shifted.

On its part, Bitfinex has been mapping the funds stolen during the hack and even offered a $400 million reward to restore the lost bitcoins.

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