Azoundria: Created page with "{{Imported Case Study With About|source=https://www.quadrigainitiative.com/casestudy/bitfinexproceedsusgovernmentcontrolledwalletsbreached.php}} {{Unattributed Sources}} Bitfinex Logo/HomepageIn 2016, the Bitfinex exchange was hacked. These funds were seized by the US government in 2022. In October 2024, their wallet was breached and the funds were relocated. The funds were returned the next day, suggesting that the US government was able to..."

2024-12-03T21:13:02Z

Created page with "{{Imported Case Study With About|source=https://www.quadrigainitiative.com/casestudy/bitfinexproceedsusgovernmentcontrolledwalletsbreached.php}} {{Unattributed Sources}} thumb|Bitfinex Logo/HomepageIn 2016, the Bitfinex exchange was hacked. These funds were seized by the US government in 2022. In October 2024, their wallet was breached and the funds were relocated. The funds were returned the next day, suggesting that the US government was able to..."

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{{Imported Case Study With About|source=https://www.quadrigainitiative.com/casestudy/bitfinexproceedsusgovernmentcontrolledwalletsbreached.php}}
{{Unattributed Sources}}

[[File:Bitfinex.jpg|thumb|Bitfinex Logo/Homepage]]In 2016, the Bitfinex exchange was hacked. These funds were seized by the US government in 2022. In October 2024, their wallet was breached and the funds were relocated. The funds were returned the next day, suggesting that the US government was able to negotiate with the attacker successfully.<ref name="nftcryptobottletwitter-16872" /><ref name="misttrackiotwitter-16873" /><ref name="light-16874" /><ref name="ccn-16875" /><ref name="ergobtctwitter-16876" /><ref name="cointelegraph-16877" /><ref name="reddit-16878" /><ref name="decrypt-16879" /><ref name="cryptotimes-16880" /><ref name="arkhaminteltwitter-16881" /><ref name="etherscan-16882" /><ref name="etherscan-16883" /><ref name="zachxbttwitter-16884" />

== About Bitfinex Hack ==
"The stolen funds were originally seized from Ilya Lichtenstein and Heather Morgan, who hacked the Bitfinex exchange in 2016, stealing around 120,000 Bitcoin valued at roughly $8.2 billion today. Both were arrested in 2022, and their case is now nearing sentencing, scheduled for November."

== The Reality ==
This sections is included if a case involved deception or information that was unknown at the time. Examples include:

* When the service was actually started (if different than the "official story").
* Who actually ran a service and their own personal history.
* How the service was structured behind the scenes. (For example, there was no "trading bot".)
* Details of what audits reported and how vulnerabilities were missed during auditing.

== What Happened ==
The specific events of the loss and how it came about. What actually happened to cause the loss and some of the events leading up to it.
{| class="wikitable"
|+Key Event Timeline - Bitfinex Proceeds US Government Controlled Wallets Breached
!Date
!Event
!Description
|-
|October 24th, 2024 11:29:35 AM MDT
|First Withdrawal Transaction
|The first transaction happens on the ethereum blockchain, which disables the use of USDT as collateral on the Aave protocol.
|-
|October 24th, 2024 11:53:00 AM MDT
|Arkham Intelligence Tweet
|Arkham Intelligence tweets to initially report on the theft of funds.
|-
|October 24th, 2024 1:43:00 PM MDT
|Arkham Intelligence Tweet
|Arkham intelligence reports on the government wallet appearing to have been hacked for $20m.
|-
|October 24th, 2024 1:49:00 PM MDT
|ZachXBT Likely Theft
|ZachXBT comments on how this is likely theft due to the use of instant swap services.
|-
|October 24th, 2024 4:02:41 PM MDT
|CoinTelegraph Article
|CoinTelegraph published an article which details that the funds oriignally came from the Bitfinex exchange hack.
|-
|October 24th, 2024 10:06:00 PM MDT
|MistTrack Tweet Posted
|MistTrack posts a tweet with a breakdown of where the $20m worth of tokens went.
|-
|October 24th, 2024 11:18:32 PM MDT
|The Crypto Times Article
|The Crypto Times reports on the hack.
|-
|October 25th, 2024 7:49:35 AM MDT
|Return Of Hacked Funds
|The hacked funds start to be returned to the US government.
|-
|October 25th, 2024 9:03:59 AM MDT
|Government Transfers Funds
|The government appears to transfer the funds to another wallet with supposedly greater security.
|-
|October 25th, 2024 2:50:43 PM MDT
|Decrypt Return Of Funds
|Decrypt publishes an article reporting on the return of most of the funds to the original wallet.
|}

== Technical Details ==
"According to a MistTrack tweet, a suspicious outflow was detected from a wallet controlled by the U.S. government (0xc9E...34c): nearly $20 million was transferred to 0x3486ee700ccaf3e2f9c5ec9730a2e916a4740a9f, including: 5.4M USDC, 1.12M USDT, 13.7M aUSDC and 178 ETH. Most tokens were swapped into ETH. Approximately 19.3M worth of tokens were later returned to the U.S. government address."

"Suspicious Outflow from U.S. Government-Controlled Wallet (0xc9E...34c):

~$20M was transferred to 0x3486ee700ccaf3e2f9c5ec9730a2e916a4740a9f, including: 5.4M $USDC, 1.12M $USDT, 13.7M $aUSDC and 178 $ETH. Most tokens were swapped into $ETH.

-115.93 $ETH was transferred to #Binance(suspected nested exchanges).
-63.65 $ETH was transferred to #N.exchange.
-15.86 $ETH was transferred to #Switchain.

-549 $ETH remains in 0xbf6f7c503e858aded4e18ce2bcf93846fd726c15.
-2,198 $ETH remains in 0x15d0a31ed5050ed8decd3c101aaee0b2ad2e6441.
-13.19M $aUSDC remains in 0x3486ee700ccaf3e2f9c5ec9730a2e916a4740a9f."

== Total Amount Lost ==
The total amount lost has been estimated at $21,390,000 USD.

How much was lost and how was it calculated? If there are conflicting reports, which are accurate and where does the discrepancy lie?

== Immediate Reactions ==
How did the various parties involved (firm, platform, management, and/or affected individual(s)) deal with the events? Were services shut down? Were announcements made? Were groups formed?

== Ultimate Outcome ==
What was the end result? Was any investigation done? Were any individuals prosecuted? Was there a lawsuit? Was any tracing done?

== Total Amount Recovered ==
The total amount recovered has been estimated at $19,300,000 USD.

What funds were recovered? What funds were reimbursed for those affected users?

== Ongoing Developments ==
What parts of this case are still remaining to be concluded?
== Individual Prevention Policies ==
{{Prevention:Individuals:Placeholder}}

{{Prevention:Individuals:End}}

== Platform Prevention Policies ==
{{Prevention:Platforms:Placeholder}}

{{Prevention:Platforms:End}}

== Regulatory Prevention Policies ==
{{Prevention:Regulators:Placeholder}}

{{Prevention:Regulators:End}}

== References ==
<references><ref name="nftcryptobottletwitter-16872">[https://twitter.com/NFTCryptoBottle/status/1852772951549989347 @NFTCryptoBottle Twitter] (Accessed Nov 15, 2024)</ref>

<ref name="misttrackiotwitter-16873">[https://twitter.com/MistTrack_io/status/1849663895545462919 @MistTrack_io Twitter] (Accessed Nov 26, 2024)</ref>

<ref name="light-16874">[https://light.misttrack.io/s/nPrj0 https://light.misttrack.io/s/nPrj0] (Accessed Nov 26, 2024)</ref>

<ref name="ccn-16875">[https://www.ccn.com/news/crypto/us-government-crypto-wallet-hacked-20m/ https://www.ccn.com/news/crypto/us-government-crypto-wallet-hacked-20m/] (Accessed Nov 26, 2024)</ref>

<ref name="ergobtctwitter-16876">[https://twitter.com/ErgoBTC/status/1849514836457074762 @ErgoBTC Twitter] (Accessed Nov 26, 2024)</ref>

<ref name="cointelegraph-16877">[https://cointelegraph.com/news/us-government-crypto-hacked-arkham-intelligence https://cointelegraph.com/news/us-government-crypto-hacked-arkham-intelligence] (Accessed Nov 26, 2024)</ref>

<ref name="reddit-16878">[https://www.reddit.com/r/CryptoCurrency/comments/1gbwsgz/hacker_returns_193_million_to_drained_us/ https://www.reddit.com/r/CryptoCurrency/comments/1gbwsgz/hacker_returns_193_million_to_drained_us/] (Accessed Nov 26, 2024)</ref>

<ref name="decrypt-16879">[https://decrypt.co/288296/hacker-returns-millions-drained-us-government-crypto-wallet Hacker Returns $19.3 Million to Drained US Government Crypto Wallet - Decrypt] (Accessed Nov 26, 2024)</ref>

<ref name="cryptotimes-16880">[https://www.cryptotimes.io/2024/10/25/hacker-drains-20m-from-u-s-government-controlled-wallet/ Hacker Drains $20M from U.S. Government-Controlled Wallet?] (Accessed Nov 26, 2024)</ref>

<ref name="arkhaminteltwitter-16881">[https://twitter.com/ArkhamIntel/status/1849537146861859120 @ArkhamIntel Twitter] (Accessed Nov 26, 2024)</ref>

<ref name="etherscan-16882">[https://etherscan.io/tx/0xca35f0d32f35d08580c5b643ab30ee39cbaed2540818d9ad5ab539bda884eae4 Ethereum Transaction Hash (Txhash) Details | Etherscan] (Accessed Nov 26, 2024)</ref>

<ref name="etherscan-16883">[https://etherscan.io/tx/0x60d72722c57e64c7eb91bee865aeb7a6e1a24ed7f4d071295e192963533f5705 Ethereum Transaction Hash (Txhash) Details | Etherscan] (Accessed Nov 26, 2024)</ref>

<ref name="zachxbttwitter-16884">[https://twitter.com/zachxbt/status/1849538641325891751 @zachxbt Twitter] (Accessed Nov 26, 2024)</ref></references>

Bitfinex Proceeds US Government Controlled Wallets Breached - Revision history