Could Bitfinex reward hackers for return of stolen Bitcoins?

Could Bitfinex reward hackers for return of stolen Bitcoins?

In 2016, crypto exchange Bitfinex was the victim of a devastating hack that resulted in the theft of nearly 120,000 bitcoins. Now it appears that some of those coins are on the move.

With losses valued at close to US$70 million [AU$100 million] at then-current prices. the Bitfinex hack was – at the time – second only to the infamous Mt. Gox hack in terms of severity and total amount stolen.

The stolen bitcoins were sent to thousands of BTC addresses where they remained unmoved for almost three years.

Stolen Bitcoin on the move

April 25th marked the first verified movement of the stolen funds when Reddit user u/jankeldidi alerted readers that more than 550 bitcoins – valued at more than $3 million – were transferred to new wallets with no previous transaction history.

Now it appears as if the hackers are at it again.

At 4:10 pm AEST Friday, five transactions totaling 165.43 bitcoins were moved from the hackers’ wallets to an unknown address.

Since then, a sixth transaction in the amount of 24.26 bitcoins has also been moved, bringing today’s total to 189.69 bitcoins valued at more than $1.5 million at current BTC prices.

The six transactions were posted on Twitter by @whale_alert, a service that tracks large cryptocurrency transactions.

@whale_alert postings of Bitfinex stolen bitcoins
@whale_alert Twitter posts: [1] [2] [3] [4] [5] [6]
In total, more than 742 BTC have been moved by the hackers since April.

No bad deed goes unrewarded

There is an interesting excerpt from the LEO whitepaper – Bitfinex’ native platform token – that reads:

“[Bitfinex] is working with industry leaders to create a procedure to offer the hacker the chance to safely and privately refund the majority of the stolen funds while keeping a percentage of them as reward for collaborating in finally resolving this issue.”

This is in specific reference to the 2016 hack and essentially means that Bitfinex is exploring the possibility of a system that actually rewards hackers for returning stolen funds by allowing them to keep a certain percentage.

While some may see such a policy an acceptable compromise in the crypto space’s current Wild West environment, others feel that it will simply encourage further attacks.

For its part, the exchange denies that the possibility of such a reward system has anything to do with the movement of the stolen bitcoins.

“We are not involved, and the movement is not tied to the procedure outlined in the UNUS SED LEO white paper,” said Bitfinex marketing director Anneka Dew in an email to Hard Fork.

Getting out while the getting is good

Another possibility is that the hackers may be trying to cash out while they can still launder their ill-gotten gains.

Between May 22nd and June 2nd, two of the world’s largest crypto mixing services – and – were shut down.

Six of Bestmixer’s servers were seized in connection with a year-long money laundering investigation, while Bitblender voluntarily shut down its operation.

With such services being viewed by international authorities as little more than money laundering operations, if this trend continues, opportunities for hackers and other criminals to ‘wash’ their cryptocurrencies could become fewer and farther between.

Micky is a news site and does not provide trading, investing, or other financial advice. By using this website, you affirm that you have read and agree to abide by our Terms and Conditions.
Micky readers - you can get a 10% discount on trading fees on FTX and Binance when you sign up using the links above.