On Monday,February 25, cryptocurrency exchange Bitfinex confimed that 27.66270285 Bitcoins (BTC) that were stolen in the August 2016 security breach have been received by Bitfinex from the U.S. government as the result of U.S. law enforcement efforts.
According to the announcement, cryptocurrency exchange, Bitfinex, has collaborated with U.S. Government to provide intelligence and assist with investigations. Bitfinex was alerted in November 2018 that the U.S. law enforcement agencies had obtained bitcoins believed to be proceeds from the 2016 hack.
“Bitfinex has now retrieved 27.7 BTC and, further to the recovery strategy outlined in the aftermath of the hack, this is being converted to USD and paid to RRT (Recovery Right Token) Holders,” the announcment reads.
RRTs and Bitfinex’s Hack Recovery Plan
Following the theft on August 2nd 2016, Bitfinex took a unique approach, generalising the losses across all accounts and crediting BFX tokens to crypto exchange customers at a ratio of 1 BFX to 1 dollar lost.
Bitfinex honoured its commitment to repay the losses. 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. All BFX tokens were destroyed within this process. Additionally, Bitfinex created a tradable Recovery Right Token (RRT) for BFX holders that converted BFX tokens into shares of iFinex.
The benefit to RRT holders is that in the event of any retrieval of the stolen property, and after any outstanding or unconverted BFX token holders have been reimbursed, recovered funds are distributed to RRT holders, up to 1 dollar per RRT. As all BFX tokens have been redeemed and destroyed, the full amount of recovered bitcoins today is being distributed pro rata to the RRT holders.
“Over two years following the hack of the Bitfinex platform, today we see the results of a clear and robust response strategy and the efforts of the U.S. government. It gives us great pleasure to be able to reimburse our traders that were loyal to us and believed in us at a very difficult time. We would like to thank U.S. federal law enforcement agencies for their ongoing efforts to investigate the security breach and their commitment to seizing and returning stolen assets.
We will continue to assist law enforcement with their inquiries, and also once again extend an open invitation to the hackers, or anyone harbouring information pertaining to the breach, to make contact in whichever medium they feel most secure with, to finally resolve the situation in a mutually beneficial manner,” said Giancarlo Devasini, Chief Financial Officer at Bitfinex.