Bitfinex's UNUS SED LEO token (LEO) exploded to a new all-time high of $8.14 on Tuesday, shortly after the U.S. Department of Justice (DOJ) announced it had seized 94,000 Bitcoin stolen in an August 2016 Bitfinex hack.
The price of LEO has pulled back slightly since then, with the token currently changing hands around $7.37, according to CoinGecko.
This still represents a massive increase of over 50% over the last 24 hours, with over 80% of the last day's trading volume happening on FTX and, of course, Bitfinex.
Launched in May 2019, LEO is the utility token for Bitfinex and its affiliated platforms, giving its holders a range of benefits, including reduced trading fees and discounts on other products and services.
Soon after the launch, Bitfinex's parent company iFinex used LEO to raise $1 billion, selling the freshly-minted token in exchange for stablecoin Tether (USDT) to replace $850 million it lost to the Panama-based bank Crypto Capital.
The latest surge, which saw LEO moving up to 24th place in terms of market capitalization, can most likely be attributed to the seizure of Bitcoin stolen in the August 2016 hack of crypto exchange Bitfinex.
According to the DOJ, law enforcement has seized 94,000 Bitcoin (worth $3.6 billion at the time of seizure) linked to the hack. The total amount of Bitcoin hacked at that time amounts to 119,756 BTC.
Alongside the seizure, law enforcement has also arrested a couple from New York City in alleged connection with the case.
The couple has been charged with alleged conspiracy to commit money laundering, which carries a maximum sentence of 20 years in prison, and alleged conspiracy to defraud the United States, which carries a maximum sentence of five years in prison.
LEO, Bitfinex token burn
There's another important property of the LEO token that's relevant to investors, especially in light of the recent seizure.
According to its white paper, Bitfinex pledged to use at least 80% of any of the Bitcoin it recovered from the 2016 hack to purchase LEO in the open market and burn it.
The crypto exchange has confirmed its commitment to its pledge in its Tuesday statement, saying that it would work with the DOJ to recover the seized Bitcoin.
"If Bitfinex receives a recovery of the stolen bitcoin, as described in the UNUS SED LEO token white paper, Bitfinex will, within 18 months of the date it receives that recovery use an amount equal to 80% of the recovered net funds to repurchase and burn outstanding UNUS SED LEO tokens," reads the statement.
Bitfinex added that, in addition to open market transactions, these repurchases can be accomplished by acquiring LEO in over-the-counter trades, "including directly trading Bitcoin for UNUS SED LEO."
For now, though, the Bitcoin remains in the custody of the DOJ, meaning that no LEO tokens will be burned.