Bitfinex Hackers Move over $3 Billion of the Stolen Bitcoins

Stolen bitcoins from the 2016 Bitfinex hack are moving. The BTC address that held the cryptocurrencies Cryptocurrencies By using cryptography, virtual currencies, known as cryptocurrencies, are nearly counterfeit-proof digital currencies that are built on blockchain technology. Comprised of decentralized networks, blockchain technology is not overseen by a central authority.Therefore, cryptocurrencies function in a decentralized nature which theoretically makes them immune to government interference. The term, cryptocurrency derives from the origin of the encryption techniques that are employed to secure the netw By using cryptography, virtual currencies, known as cryptocurrencies, are nearly counterfeit-proof digital currencies that are built on blockchain technology. Comprised of decentralized networks, blockchain technology is not overseen by a central authority.Therefore, cryptocurrencies function in a decentralized nature which theoretically makes them immune to government interference. The term, cryptocurrency derives from the origin of the encryption techniques that are employed to secure the netw Read this Term has been monitored since the Bitfinex hack. There are speculations the coins were sent to another address in preparation for liquidation or to send tremors through the markets.

First, let's recap the Bitfinex hack. Bitfinex released the following statement when it discovered 119,796 bitcoins were stolen in 2016 in over 2,000 transactions:

"Today we discovered a security breach that requires us to halt all trading on Bitfinex, as well as halt all digital token deposits to and withdrawals from Bitfinex. We are investigating the breach to determine what happened, but we know that some of our users have had their bitcoins stolen. We are undertaking a review to determine which users have been affected by the breach."

Where were the Stolen Bitcoins Distributed?

119,796 bitcoins are worth $4.5 billion at the current market price. At the time of the hack, the bitcoins were worth approximately $65 million. The hackers exploited a vulnerability that allowed them to expose Bitfinex's key. As opposed to MtGox where over 500,000 bitcoins were stolen, Bitfinex remained operational.

source: Elliptic

Elliptic has been tracking the stolen bitcoins. As of May 2021, only 4% of the stolen coins were laundered. Elliptic discovered the stolen BTC were funnelled into 3 types of actor: darknet markets (84%), privacy wallets (12%) and exchanges (4%).

Hydra has been favoured by cybercriminals due to cash-out services that are offered on the platform. The most notable form of cash-out in Hydra is physical cash in a predetermined location.

Hydra has its own couriers (most of which are women according to Elliptic) that deliver any items to a secret location.

source: Elliptic

Hydra is the biggest marketplace in the darknet following the collapse of AlphaBay in 2017. In 2020, Bitfinex offered up to $400 million in rewards for the return of the stolen bitcoins:

"Bitfinex is offering a reward to any person that connects us with hackers responsible for the unauthorized transfer of almost 120,000 bitcoins from the exchange in August 2016. As part of the same initiative, Bitfinex is also offering a reward to the hackers themselves for the return of the stolen property."

An Attempt to Launder?

The BTC address that held the stolen bitcoins sent 94,643 bitcoins (approximately $3.6 billion) earlier today.

Address: bc1qazcm763858nkj2dj986etajv6wquslv8uxwczt

This address has transacted 26 times on the Bitcoin blockchain Blockchain Blockchain comprises a digital network of blocks with a comprehensive ledger of transactions made in a cryptocurrency such as Bitcoin or other altcoins.One of the signature features of blockchain is that it is maintained across more than one computer. The ledger can be public or private (permissioned). In this sense, blockchain is immune to the manipulation of data, making it not only open but verifiable. Because a blockchain is stored across a network of computers, it is very difficult to tamp Blockchain comprises a digital network of blocks with a comprehensive ledger of transactions made in a cryptocurrency such as Bitcoin or other altcoins.One of the signature features of blockchain is that it is maintained across more than one computer. The ledger can be public or private (permissioned). In this sense, blockchain is immune to the manipulation of data, making it not only open but verifiable. Because a blockchain is stored across a network of computers, it is very difficult to tamp Read this Term. It has received a total of 94,643.29856151 BTC ($3,636,364,942.24) and has sent a total of 0.00000000 BTC ($0.00). The current value of this address is 94,643.29856151 BTC ($3,636,364,942.24).

Laundering this amount in a short time is near to impossible. There are speculations that the move was aimed to weaken BTCUSD, in which the hackers may profit from while holding short positions prior to moving the bitcoins.

The reason why the movement of Bitnex stolen bitcoins affected BTC is on fear of liquidation. Liquidating a large quantity of bitcoins may devalue BTCUSD in the exchanges. The market reacts despite the fact it cannot be done in such a short time.

BTCUSD dropped from the daily high of $39,000 (approx.) to just under $38,000. At the time of writing, BTCUSD is correcting higher.