US Govt recovers Fractions of Funds Stolen from Bitfinex

The United States government has partially returned stolen Bitcoins to Bitfinex which were recovered after a major theft from the Exchange Exchange An exchange is known as a marketplace that supports the trading of derivatives, commodities, securities, and other financial instruments.Generally, an exchange is accessible through a digital platform or sometimes at a tangible address where investors organize to perform trading. Among the chief responsibilities of an exchange would be to uphold honest and fair-trading practices. These are instrumental in making sure that the distribution of supported security rates on that exchange are effectiv An exchange is known as a marketplace that supports the trading of derivatives, commodities, securities, and other financial instruments.Generally, an exchange is accessible through a digital platform or sometimes at a tangible address where investors organize to perform trading. Among the chief responsibilities of an exchange would be to uphold honest and fair-trading practices. These are instrumental in making sure that the distribution of supported security rates on that exchange are effectiv Read this Term.

According to the crypto exchange's official post on Medium, it has received 27.7 BTC worth around $104,000.

In a massive attack in August 2016, Bitfinex lost around 120,000 BTC then worth around $72 million, which makes the recent recovery only a fraction of the total loss.

Commenting on the US government’s move, Bitfinex’s CFO Giancarlo Devasini said: “Over two years following the hack of the Bitfinex platform, today we see the results of a clear and robust response strategy and the efforts of the U.S. government. It gives us great pleasure to be able to reimburse our traders that were loyal to us and believed in us at a very difficult time. We would like to thank U.S. federal law enforcement agencies for their ongoing efforts to investigate the security breach and their commitment to seizing and returning stolen assets.”

The British Virgin-island registered exchange is one of the top global crypto exchanges and, according to Coinmarketcap.com’s data, is recently handling around $450,000 worth of trade orders daily.

One of the Largest Crypto Heist

The theft from Bitfinix is the fourth largest heist from a crypto exchange - only falling behind the hacks of Coincheck, Mt. Gox Mt. Gox Mt. Gox is the name of a Japan-based cryptocurrency exchange that was infamously hacked for 850,000 BTC worth roughly $450 million at the time in February of 2014. During July 2010 Mt. Gox formally launched Mt. Gox launched its exchange and price quoting service. It was subsequently sold to French developer Mark Karpelès in early 2011.Prior to its hacking, Mt. Gox suffered from other security vulnerabilities as early as June 2011. On 19 June, 2011, a security breach of the exchange caused the no Mt. Gox is the name of a Japan-based cryptocurrency exchange that was infamously hacked for 850,000 BTC worth roughly $450 million at the time in February of 2014. During July 2010 Mt. Gox formally launched Mt. Gox launched its exchange and price quoting service. It was subsequently sold to French developer Mark Karpelès in early 2011.Prior to its hacking, Mt. Gox suffered from other security vulnerabilities as early as June 2011. On 19 June, 2011, a security breach of the exchange caused the no Read this Term, and BitGrail. According to Reuters, both US and European law agencies were involved in the investigation of the attack, however, the details are not available in the public domain yet.

While Bitfinex maintained its operations and Coincheck resumed its full services recently after receiving a license from the Japanese regulator, the fate of the other two exchanges was not praiseworthy. Mt. Gox shut its doors in 2014, leaving millions of its clients' funds under jeopardy, while BitGrail is still under scrutiny.

Fair Compensation?

To compensate the victims, the crypto exchange credited BFX tokens, the platform's native digital coin, one per every dollar lost, to its clients' accounts. It also provided an option to the victims either to redeem the token for one dollar each or swap them for the company’s stocks. In both cases, the exchange destroyed the issued tokens after the clients’ action and issued Recovery Right Token (RRT) tokens to those who opted to receive company stocks.

“We will continue to assist law enforcement with their inquiries, and also once again extend an open invitation to the hackers, or anyone harboring information pertaining to the breach, to make contact in whichever medium they feel most secure with, to finally resolve the situation in a mutually beneficial manner,” Devasini added.