U.S. DOJ Requests Return of Bitcoin Seized in 2016 Bitfinex Hack

The U.S. Department of Justice (DOJ) has filed a motion seeking the return of Bitcoin (BTC) confiscated following the 2016 Bitfinex hack. A legal document submitted on January 14 detailed plans to return around 94,643 BTC to the cryptocurrency exchange.

Additionally, the motion includes the return of Bitcoin Cash (BCH), Bitcoin Satoshi Vision (BSV), and Bitcoin Gold (BTG) derived from hard forks, with these assets to be returned in kind.

The case dates back to 2016 when Ilya Lichtenstein, 35, exploited Bitfinex’s system, conducting over 2,000 unauthorized transactions to move 119,754 BTC to his wallet. To cover his tracks, Lichtenstein deleted network credentials and logs. He and his wife, Heather Morgan—also known as Razzlekhan—were arrested in 2022 and later convicted for their roles in the hack.

Bitfinex’s Recovery Plan

Following the hack, Bitfinex suspended withdrawals and launched a recovery strategy. The plan redistributed losses across accounts, resulting in a 36% reduction in value for all user accounts.

To offset the losses, Bitfinex issued BFX Tokens (BFX), which customers could redeem for iFinex shares, the stock of Bitfinex’s parent company. Each token was pegged to the fiat-denominated losses incurred during the hack. Within eight months, customers redeemed all BFX tokens, meeting the DOJ’s requirements for victim reimbursement.

In October 2024, the DOJ disclosed that Bitfinex was likely the sole entity eligible for reimbursement due to its efforts to compensate users. However, the government acknowledged that the compensation plan may have affected thousands of users and invited victims to submit impact statements by November 2024.

Notably, a dedicated website was also established to inform Bitfinex account holders of their legal rights related to the case.

Expansion of Bitfinex Operations

In separate news, Bitfinex Securities, the platform’s El Salvador-based arm, has introduced tokenized U.S. Treasury bills. According to CoinTab, NexBridge Digital, a digital asset provider based in El Salvador, will issue the tokens.