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Uncle Sam Moves Almost $1B in Bitcoin from Bitfinex Hack, Attacker Turns Witness

2 mins
Updated by Kyle Baird
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In Brief

  • The United States government transferred $1 billion from seized Bitfinex funds after $4.5 billion hack in 2016.
  • The destination wallet addresses were undisclosed; however the hacker Ilya Lichtenstein cooperating as witness.
  • Lichtenstein reveals he had access to Bitfinex for months, as well as individual accounts on Coinbase.
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Yesterday, the United States government transferred approximately $1 billion in funds seized from the malicious hack of the crypto exchange Bitfinex, which totaled $4.5 billion in the 2016 breach.

The destination wallet addresses remain unknown. However, hacker Ilya Lichtenstein is cooperating as a witness in the case, providing details on how he executed the attack.

Funds From Bitfinex Hack Under Scrutiny

According to data from Arkham Intelligence, the United States Federal Government transferred approximately $921.4 million from the wallets holding the seized funds from the Bitfinex hack.

Meanwhile, on February 28, it emerged that Lichtenstein is testifying against the crypto mixer he utilized for the $4.5 billion hack in 2016.

Bitcoin Transfers from United States Government. Source: Arkham Intelligence
Bitcoin Transfers from the United States Government. Source: Arkham Intelligence

According to a recent report, Lichtenstein is now helping the US government as a witness. He will be detailing how he managed to pull off the massive Bitcoin heist.

Furthermore, Lichtenstein revealed that he maintained access to the Bitfinex systems for months. Additionally, he infiltrated individual accounts at Coinbase and Kraken.

Read more: Bitcoin Price Prediction 2024/2025/2030

He elaborated that he utilized a crypto mixer known as Bitcoin Fog. Furthermore, he admitted to using the crypto mixer up to 10 times to launder a portion of the stolen funds.

He asserted that his motive for hacking the exchange stemmed from issues he was encountering with his tech startup in San Francisco.

US Government Cracks Down on Crypto Mixers

This follows news that the US government is severely cracking down on crypto mixers within the nation.

In August 2023, BeInCrypto reported that the US government formally sanctioned Roman Semenov, co-founder of the virtual currency mixer Tornado Cash. Officials accused him of helping North Korean hackers launder hundreds of millions in stolen funds.

Read more: Who Owns the Most Bitcoin in 2024?

Meanwhile, in October 2023, the US government proposed legislation targeting crypto mixers, aiming to subject them to regulations akin to those applied to foreign banks and jurisdictions.

The proposal mandates meticulous record-keeping and reporting for financial transactions involving crypto mixers.

Top crypto projects in the US | April 2024

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Ciaran Lyons
Ciaran is a cryptocurrency journalist based in Sydney, Australia. He particularly enjoys writing about CBDC developments and the practical implementations of cryptocurrency in real-world scenarios. He has also appeared across major television networks in Australia including Channel Ten, Channel Nine and SBS TV. Prior to his foray into cryptocurrency, Ciaran worked as a presenter on national radio station Triple J.
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