Now that the US government has recovered most of the bitcoin stolen from Bitfinex in 2016, more and more institutions and individuals are coming out of the woodwork trying to claim it.
As reported by BeInCrypto on February 9, the Justice Department confiscated 94,636 BTC from a New York couple who were charged with massive money laundering (but not the hack itself).
As a result, crypto Twitter was flooded with concerns that the US government now had this giant bitcoin bag and could sell it, crashing recently upbeat markets. However, the rights to the loot belonged to Bitfinex, which needed to find out who owned it at the time of the hack more than five years ago.
The $3.6 billion in bitcoin confiscated is about 80% of the total amount stolen in the hack, for a total of $4.5 billion.
Who wants bitcoin?
On February 10, Bloomberg reported that lawyers specializing in crypto fraud have been overwhelmed by calls from people claiming to have a massive amount, or part of it.
One such lawyer, David Silver, said he had received “dozens of calls” from individuals saying they lost money in a 2016 exchange hack. “The world has changed dramatically since 2016, and everyone is going to claim this new bag of bitcoins,” he said.
Additionally, Justice Department officials said they intend to establish a court process for victims to retrieve stolen crypto assets.
At the time of the Bitfinex hack in August 2016, bitcoin was trading at around $600. It has since increased by 7,200%, which means there could be a large number of new crypto millionaires if the actual victims are reimbursed.
$30 million reimbursement
At the time, Bitfinex allocated losses of more than 30% to all customer accounts. The exchange then created BFX tokens which it issued to users one on one for every $1 they lost. According to the report, all those tokens were redeemed or exchanged for iFinex Capital stock within eight months.
Bitfinex also created another token called the Recovery Right Token (RRT), which will be used to reimburse the stolen assets whenever they are recovered.
According to Bitfinex, “there are currently 30 million RRT tokens outstanding. This could lead to a reimbursement of up to $30 million.”
The exchange is also planning to use some of the recovered funds to buy and liquidate its LEO tokens created in 2019.
Some customers disagree that a San Francisco resident claims he wants his BTC back, “This is my bitcoin they took from my multisig wallet. I want my bitcoin back.”
Kyle Roche of Roche Friedman LLP commented that a lot will depend on the user agreement Bitfinex customers signed with the company in 2016. Another major issue stems from KYC when verifying the identity of wallet owners on exchanges. The requirements were not enforced so strictly.
The process is likely to be long and drawn out and it may be years before any money is seen.