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On February 8, the United States Department of Justice (DOJ) announced that it had arrested two people for allegedly conspiring to whiten cryptocurrency stolen in 2016 Bitfinex hack – crypto currently valued at around $4.5 billion. So far, law enforcement officials have seized over $3.6 billion in crypto linked to this hack – the largest financial ever seized, according to a DOJ press release.
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Following the announcement, the cryptocurrency known as Unus Sed Leo, which was issued in part for recapitalize the Bitfinex exchange after the 2016 hack jumped more than 50%, Bloomberg reported.
On February 9, the crypto was up 37%, according to CoinMarketCap.
Cryptocurrency analysts hail historic recovery of stolen crypto
Stéphane Ouelette, co-founder and CEO of institutional cryptocurrency platform FRNT Financial, told GOBankingRates that “for those of us who have been in the space for a while, it’s hard to imagine an announcement more important”. [than the recovery announcement].”
“Despite the benign market action following the announcement, we expect this to have a positive impact on the counterparty risk assessment of the crypto ecosystem which continues to prevent many large investors/institutionals from participating. to space,” Ouelette said.
“Now a potential crypto investor may think that not only are the major exchanges more sophisticated and very well capitalized, but even in the event of an extreme risk hack, the potential for recovery is very real. In a space with lots of loud and mundane headlines, this is a real and significant positive development for Bitcoin and cryptocurrency as a whole.
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In a Feb. 8 announcement on its website, Bitfinex said it was pleased that the DOJ had recovered a significant portion of the Bitcoin stolen during the August 2016 security breach, and that it had cooperated closely with the DOJ. DOJ since beginning its investigation. – And will continue to do so.
“Bitfinex will work with the DOJ and follow appropriate legal procedures to establish our rights to a return of stolen Bitcoin. Bitfinex intends to provide further updates on its efforts to get stolen Bitcoin back as these updates become available,” the company said.
Bitfinex added that if it receives recovery of the stolen bitcoin, as described in the Unus Sed Leo token whitepaper, “Bitfinex will use, within 18 months from the date it receives such recovery, an amount equal to 80 % of net funds recovered to buy back and burn Unus Sed Leo tokens in circulation.These token buybacks can be done through open market transactions or by acquiring Unus Sed Leo in over-the-counter transactions, including by directly exchanging bitcoins for Unus Sed Leo.
History of the Bitfinex hack, legal steps ahead
On August 2, 2016, Bitfinex suffered a hack, depleting the exchange of 119,756 BTC, according to the white paper. “To call it a huge loss is a gross understatement, and many trades – and in similar circumstances have done so – would throw in the towel in the face of seemingly insurmountable odds. Instead, the entire Bitfinex team stood united and worked together to find a solution to both save the platform and make everyone whole in less than a year,” according to the white paper.
William Callahan, director of government and strategic affairs at cryptocurrency compliance and intelligence firm Blockchain Intelligence Group, agreed. He told GOBankingRates: “The officers in this case have shown an ability to navigate the complexities of crypto crimes, and the agents, prosecutors and analysts will work just as hard in the months and years to come, as did the officers who performed this seizure. As we witness wider adoption of cryptocurrency, this case highlights the growing importance for law enforcement at all levels to build awareness and education relating to crypto crimes.
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Callahan added, however, that while the defendants will now go through criminal court proceedings, the funds seized will also go through legal forfeiture proceedings, which could take place in a criminal or civil action. This could tie up funds for several years.
“Before the U.S. government issues a check for $4.5 billion to Bitfinex, potential victims or plaintiffs can file a lawsuit and claim some or all of the funds. They will have the opportunity to prove that their request is justified and will probably rely on block chain analysis and expert testimony to back up their claims,” he said.
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This article originally appeared on GOBankingRates.com: Stolen Crypto Worth $3.6 Billion Recovered by DOJ: Bitfinex’s Unus Sed Leo
