US GOV’T RETURNS TO BITFINEX BITCOIN RETRIEVED FROM 2016 HEIST

The U.S. government has recovered stolen 27.66270285 BTC – worth just over $104,000 and returned it to cryptocurrency exchange Bitfinex, the company said on Monday.

Bitfinex said that, since the hack, it has been collaborating with international law enforcement agencies “to provide intelligence and assist with investigations,” adding:

Bitfinex was alerted in November 2018 that the U.S. government had obtained bitcoins believed to be proceeds from the 2016 hack.

Bitfinex has now retrieved 27.7 BTC and, further to the recovery strategy outlined in the aftermath of the hack, this is being converted to USD and paid to RRT (Recovery Right Token) Holders. To compensate for the hack losses in 2016, the exchange generalized the losses across all accounts and credited BFX tokens to customers at a ratio of 1 BFX to every dollar stolen.

Within eight months, all BFXcoin holders had their tokens redeemed at this rate, says the exchange.

All BFX tokens were destroyed within this process. Additionally, Bitfinex created a tradable Recovery Right Token (RRT) for BFX holders that converted BFX tokens into shares of iFinex,” Bitfinex explains. “As all BFX tokens have been redeemed and destroyed, the full amount of recovered bitcoins today is being distributed pro rata to the RRT holders.

British Virgin Islands-registered Bitfinex, by some rankings the second-biggest exchange in the world by trading volume, said it will convert the returned bitcoin to dollars and distribute the cash to around 5,000 customers affected by the heist.

U.S. and European law enforcement agencies investigated the heist, Bitfinex General Counsel Stuart Hoegner told Reuters, declining to give further details or name the agencies involved. Along with major thefts from Tokyo-based Mt.Gox, which led to its collapse in 2014, and Tokyo’s Coincheck in 2017, the Bitfinex hack added to investor worries over the security of bitcoin and other cryptocurrencies, which remain largely unregulated across the world.

The response has varied from regulators in countries across the globe, many concerned about the volatility and potential for criminals to use cryptocurrencies for money laundering and other illicit activities.