Tuesday, February 25, 2020

U.S. Government Returns Stolen Bitcoins to Bitfinex Cryptocurrency Exchange

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Grace Joseph
Freelance Writer, Blogger, and Crypto Enthusiast. Studied Computer Science in University and Undergoing a Masters Degree Programme in Computer Engineering Contact@ reigngracia@gmail.com

Bitfinex, a cryptocurrency exchange on February 25 stated that the U.S. government has returned 27.7 Bitcoins to the exchange. In the first instance, funds which were stolen from the Hong-Kong based exchange were seized by the government. The theft was as a result of a hack on the platform which occurred in 2016.

Seized Funds Returned by the U.S. Government

According to Bitfinex, the United States government has returned 27.66270285 Bitcoins to them. The funds were seized by the government after a hack on the exchange on August 2, 2016. Bitfinex also revealed that the refund was brought about by the effort of the U.S law officials who they had worked hand-in-hand with for over two years.

More light into the nature of the hack reveals that the funds had been unlawfully taken. In November 2018, Bitfinex was alerted that the government has received the funds. From that time, the exchange has been able to retrieve 27.7 BTC which is being used to compensate those who were affected by the attack.

Compensating Victims of the Hack on the Exchange

In the case of the latter, a recovery plan was set up to compensate the victims. The exchange outlined that they had awarded BFX tokens to accounts that had been affected. BFX could then be redeemed for dollars at a ratio of 1 BFX to a dollar.

Bitfinex also stated that:

Within eight months of the security breach, all BFX token holders had their tokens redeemed at 100 cents on the dollar or exchanged their tokens for, directly or indirectly, shares of the capital stock of iFinex Inc.

Giancarlo Devasini, Chief Financial Officer at Bitfinex also made comments. He said the results today can be traced back to the strategy that was set up after the hack occurred. Devasini also stated that they were delighted to be able to reimburse their traders who were loyal to them during the trying times.

Coincheck Crypto Exchange Also Compensated Customers

Hack of this nature is nothing new to the crypto space. Coincheck, a virtual currency exchange that also suffered a security breach in 2018, was able to compensate its customers. The exchange which had lost $530 million worth of NEM tokens is now licensed and fully operational in Japan.

While these Are positive turn out of events, it is still uncertain how the outcome will be on platforms like QuadrigaCX and Cryptopia. The former claims to have lost access to C$190 million owned by customers. Cryptopia, on the other hand, suffered a major hack on January 14.

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