Bitfinex Hack Funds: US Government Moves Almost 1 Billion Dollars in Bitcoin, Hacker Now Cooperating as a Witness

Crypto News– Yesterday, the United States government executed the transfer of approximately $1 billion in funds seized from the notorious hack of the cryptocurrency exchange Bitfinex, which amounted to $4.5 billion in the 2016 breach.

Bitfinex Hack Funds: US Government Moves Almost 1 Billion Dollars in Bitcoin, Hacker Now Cooperating as a Witness

While the destination wallet addresses remain undisclosed, the hacker behind the attack, Ilya Lichtenstein, is now cooperating as a witness in the case, providing insights into the execution of the breach. According to data from Arkham Intelligence, the US Federal Government transferred around $921.4 million from the wallets containing the seized funds from the Bitfinex hack.

In related developments, it came to light on February 28th that Lichtenstein is providing testimony against the crypto mixer he utilized for the $4.5 billion hack in 2016. As per recent reports, Lichtenstein is collaborating with the US government as a witness, divulging details on how he orchestrated the massive Bitcoin theft.

Additionally, Lichtenstein disclosed that he maintained unauthorized access to the Bitfinex systems for several months. Moreover, he infiltrated individual accounts on cryptocurrency platforms like Coinbase and Kraken. He revealed his use of a crypto mixer called Bitcoin Fog and acknowledged employing it up to 10 times to launder a portion of the stolen funds.

Lichtenstein asserted that his motivation for hacking the exchange stemmed from issues he encountered with his technology startup in San Francisco.

US Authorities Take Action Against Cryptocurrency Mixing Services

In light of recent developments, it has been revealed that the US government is taking stringent measures against cryptocurrency mixers operating within the nation.

Back in August 2023, BeInCrypto reported on the formal sanctioning of Roman Semenov, the co-founder of the virtual currency mixer Tornado Cash, by US authorities. Semenov was accused of aiding North Korean hackers in laundering hundreds of millions of dollars in stolen funds.

Subsequently, in October 2023, the US government introduced legislation aimed directly at crypto mixers, proposing regulations similar to those imposed on foreign banks and jurisdictions. This proposed legislation necessitates thorough record-keeping and reporting for all financial transactions involving crypto mixers.