U.S. Prosecutors Seek to Return $10 Billion Bitcoin to Bitfinex  

• Prosecutors plan to remit 80% of 119,754 BTC recovered from the Bitfinex hack as in-kind restitution, marking a major recovery step. 
• Authorities seized 94,643 BTC from hacker Ilya Lichtenstein, whose laundering attempts complicated the return of 25,000 BTC. 
• Lichtenstein and his associate, Heather Morgan, stole 120,000 BTC in 2016, and most of the money has been earmarked for recovery by prosecutors. 

America’s justice department has sought permission to repay nearly $10 billion in Bitcoin to Bitfinex. It was found during officials’ investigation of the 2016 cyber attack on the cryptocurrency exchange. Of the 119,754 BTC that have been recovered, and as stated in the court documents, 80% will be paid back to the platform in-kind – restitution. 

Cops seized 94, 643 BTC which was hacked from the dark web by Ilya Lichtenstein, the mastermind behind the crime, and his girlfriend, Heather Morgan. The funds were traced back to the original wallet Lichtenstein used during the attack. 

Significant Restitution for Bitfinex 

Prosecutors highlighted that Bitfinex may be the sole victim in this case, which facilitates the restitution process. This decision aligns with U.S. law, allowing recovered assets to be returned to victims when possible. 

The restitution plan addresses a substantial portion of the stolen Bitcoin, estimated at nearly $12 billion today. This process is expected to provide some relief to the platform and its stakeholders after years of uncertainty. 

Challenges With Remaining Funds 

While the majority of the Bitcoin is ready for return, the remaining 25,000 BTC presents challenges. Prosecutors explained that portions of these stolen funds were laundered through crypto mixers, darknet markets, and advanced digital platforms, complicating their recovery. 

Consequently, the Department of Justice has proposed an ancillary forfeiture process to secure these funds. However, the timeline for completing this process remains unclear. 

Legal Consequences for Hackers 

Lichtenstein and Morgan orchestrated the theft of almost 120,000 BTC from Bitfinex in 2016. Following a detailed investigation, authorities apprehended Lichtenstein in February 2022. He later pleaded guilty to conspiracy charges of money laundering. 

The following year, Lichtenstein was docked a five-year prison sentence for his complicity in the theft. His partner, Morgan, whom he met on öffentlichen and who went by the name “RazzleKhan,” received 18 months for laundering the proceeds. 

This restitution effort underscores the government’s commitment to addressing cybercrimes in the cryptocurrency sector. Moreover, the legal framework supporting asset recovery has been instrumental in ensuring victims are compensated. 

As prosecutors navigate the complexities surrounding the remaining 25,000 BTC, Bitfinex awaits a final resolution. Further updates on the ancillary forfeiture process are anticipated in the coming months.