Billions of dollars of Bitcoin swiped from crypto exchange Bitfinex in a 2016 hack should be returned to the platform, the Department of Justice said.
In a court documents filed Tuesday, the U.S. government said that the recovered coins from the theft should go back to the exchange as there are no "victims" in the case.
Hackers took nearly 120,000 Bitcoin—today worth nearly $12 billion—and other digital tokens from the exchange in the hack. Over $9 billion worth of that has been recovered, and in the Feds' view, should be returned to Bitfinex.
Razzlekhan Drops New Music Video Ahead of Prison Time Over Bitcoin Heist
Rapper Heather “Razzlekhan” Morgan is back and dropping the first of two new singles ahead of serving 18 months in prison for her role in an infamous, multi-billion-dollar Bitcoin heist. The notorious entrepreneur and musician teased the new single and music video in recent days. Released Friday, Morgan described her new track “Razzlekhan vs. The United States” in a statement as a "misfits' anthem." Morgan further said that the song is based on her experiences during the case that stemmed from h...
Last year, Ilya Lichtenstein was sentenced to 60 months in prison for money laundering after being convicted for swiping the coins. His wife, rapper and social media personality Heather "Razzlekhan" Morgan, was separately convicted of helping to launder the funds, and sentenced to 18 months for the crime.
Bitfinex "generalized" the losses across all customers, sharing the impact of the theft, and launched a repayment program that included reimbursing them with tokens that could be redeemed for U.S. dollars or for shares in the company. The exchange has said that it believes that customers have been made whole in the process, though some customers have pushed back on that claim—particularly given the surging value of Bitcoin the years since.
In the U.S. government's eyes, however, there are no specific victims.
"For the foregoing reasons, there is no 'victim' for the specific offenses of conviction in this proceeding," the filing reads.
It added that not all of the crypto could be retrieved due to "the complexity of the laundering transactions," and that "third-party ancillary forfeiture proceeding" was taking place to deal with those assets.
A total of 94,643 Bitcoin will be returned to Bitfinex. That's $9.3 billion in "digital gold" at today's prices.
Hackers got hold of the Bitfinex crypto due to a fault with the exchange's security surrounding multi-signature wallets. Lichtenstein and Morgan then used advanced laundering techniques to cover their tracks, the Department of Justice said last year, particularly using crypto mixing services.
Morgan, who is set to report to prison this month, hasn't let jail time hold her back from her rap career: Earlier this month, the musician released a music video titled "Razzlekhan vs. The United States"—and even told Decrypt that the song was dedicated to "misfits" like herself.
Edited by Andrew Hayward
Editor's note: This story was updated after publication to correct the headline. Over $9 billion worth of the Bitcoin has been recovered and should be returned to Bitfinex, in the DOJ's view.
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