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US Government Ready To Return Fund Forfeited From The 2016 Bitfinex Hack

US Government Ready To Return Fund Forfeited From The 2016 Bitfinex Hack
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The decision could mean a massive injection of funds for the exchange and some users

The US government has initiated steps to return a significant portion of cryptocurrency linked to the infamous 2016 Bitfinex hack. Many customers who lost large amounts of money could benefit from this move.

A recent legal motion filed on January 14 outlines plans to return approximately 94,643 Bitcoin (BTC), along with amounts of Bitcoin Cash (BCH), Bitcoin Satoshi Vision (BSV), and Bitcoin Gold (BTG) obtained through hard forks, back to the Bitfinex exchange. This decision marks a critical moment in resolving one of the most notorious cryptocurrency thefts.

The 2016 hack resulted in the theft of 119,754 BTC, valued at just $72 million at the time. Today, the value of the stolen Bitcoin has skyrocketed to over $11.8 billion. The dramatic increase in value has sparked debates about how Bitfinex plans to address the recovery and distribution of funds.

Following the hack, Bitfinex implemented a recovery strategy that included a controversial 36% reduction in account balances. To compensate users, the exchange issued BFX tokens equivalent to the lost value, redeemable for shares in its parent company, iFinex. Within eight months, all BFX tokens were fully redeemed, effectively reimbursing customers.

The US government acknowledged this recovery plan in its October 2024 filing, noting that Bitfinex would likely be the sole recipient of returned funds due to its efforts to restore customer losses. However, the government also recognized that many affected customers had their account balances reduced, prompting authorities to invite impact statements from victims by November 13, 2024.

A dedicated website was launched to inform potential claimants of their rights and the legal developments related to the case. The motion to return the forfeited funds is a significant step in addressing the aftermath of the hack, offering a measure of closure to Bitfinex and the broader cryptocurrency community.

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