Stolen Bitcoin From Bitfinex 2016 Hack On The Move; Transferred To Unknown Address

US Justice Department Goes after Bitfinex’s Payment Processor
Stolen Bitcoin From Bitfinex 2016 Hack On The Move; Transferred To Unknown Address
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Hackers responsible for the 2016 Bitfinex wallets hack have moved a portion of the stolen bitcoin from their wallets to an unknown address on June 7.  Report of the movement of stolen bitcoins was circulated in a series of tweets by a crypto-transaction tracker, Whale-alert.io.

The transfer of the digital currency began earlier today at 06:08 AM UTC and involves six transactions so far, altogether worth about 185 bitcoin, or $1.5 million at press time. The transferred Bitcoin currently amounts to only 0.15% of the 120,000 BTC stolen back in August 2016. The hackers had manipulated Bitfinex’s multi-signature verification system, forcing it to approve transactions that enabled them to withdraw the stolen funds from the bitcoin wallet. The stolen bitcoin was worth $72 million at the time of the hack, but is now is equivalent to $973 million.

Bitfinex managed to recover about 28 BTC in February 2019 ($104,000 at the time) with help from the United States’ authorities. In the white paper released to debut Bitfinex LEO tokens, issued on May 8, the cryptocurrency exchange platform stated that it will continue to implement various strategies for recovery of the stolen funds.

Crypto users are speculating that the fund transfer is linked to Bitfinex, as a section of the white paper seems to forecast this type of activity.

“[…] [Bitfinex] is working with industry leaders to create a procedure to offer the hacker the chance to safely and privately refund the majority of the stolen funds while keeping a percentage of them as reward for collaborating in finally resolving this issue.”

However, Bitfinex’s marketing director Anneka Dew reportedly stated that the “movement is not tied to the procedure outlined in the UNUS SED LEO white paper”, per a report from tech publication The Next Web.

Since cryptocurrencies have gained acceptance and increased in value, hacks like Bitfinex’s have been common. Experts have advised exchange platforms to beef up security procedures in order to prevent further occurrences of breaches. Emin Gün Sirer, a famous computer scientist and specialist in hacking researches, suggested a preventive measure that could have averted the 2016 hack, and stated that it is worth implementing to put an end to the terror of cryptocurrency hacks.

“Merchants never accept payments directly from vaults; they use regular Bitcoin addresses, and payments work in the regular, irreversible fashion. But the special thing about vaults is that they come with two keys. One key is used to unlock the vault and move your funds to a regular wallet. The other one, called a recovery key, is used when you notice that your funds were hacked and moved out of the vault by a hacker. You can then use your recovery key to undo the hack — you have 24 hours to notice and launch the recovery and get back all the funds.”

According to Sirer, the solution does not tarnish Bitcoin’s reputation as an irreversible transaction currency, yet it would be a fool-proof way of keeping all loose ends tied and preventing any security breach.

About Jimmy Aki

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Jimmy has been following the development of blockchain for several years, and he is optimistic about its potential to democratize the financial system.

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