Bitfinex Hack
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anchored·4nhTZg…PZSYSummary
On August 2, 2016, the Hong Kong-based cryptocurrency exchange Bitfinex was breached by Ilya Lichtenstein, who exploited weaknesses in the exchange's BitGo multi-signature wallet setup to authorize roughly 2,000 withdrawals and steal about 119,756 BTC, worth approximately $72 million at the time. Bitfinex socialized the loss across all customers with a 36.067% haircut and issued BFX recovery tokens, which it fully redeemed or converted to equity by April 2017. In February 2022 the U.S. Department of Justice arrested Lichtenstein and his wife Heather Morgan and seized about 94,000 BTC worth $3.6 billion, then the largest financial seizure in DOJ history; both pleaded guilty in August 2023, were sentenced in November 2024 and have since been released early, while the return of the recovered bitcoin to Bitfinex remained incomplete as of mid-2026.
Connected Entities
5 entities · 60 linked investigations- Bitfinex Hack 2016→mentioned with→Bitcoin(70%)
- Bitfinex Hack→mentioned with→Bitcoin(60%)
- Bitfinex Hack 2016→mentioned with→Bitfinex / Tether(80%)
- UNUS SED LEO→mentioned with→Bitfinex / Tether(80%)
- Bitfinex / Tether→mentioned with→Bitfinex Hack(80%)
- Bitfinex Hack 2016→mentioned with→UNUS SED LEO(80%)
- Bitfinex Hack 2016→mentioned with→Bitfinex Hack(80%)
- UNUS SED LEO→mentioned with→Bitfinex Hack(80%)
- Bitfinex / Tether→mentioned with→Bitcoin(60%)
- Bitfinex Hack→mentioned with→Bitfinex / Tether(80%)
- + 1 more
Connected Through
4 shared actors · 443 investigationsDistinct actors this investigation shares with others — holders, traders, and named parties. Shared infrastructure (exchanges, pools) is excluded.
- ♦Bitcointoken
- ⌂Bitfinex / Tetherprotocol
- ⌂Bitfinex Hackprotocol
- □UNUS SED LEOorganization
Timeline(12 events)
August 2016
Ilya Lichtenstein breaches Bitfinex (August 2), executing about 2,000 unauthorized withdrawals totaling roughly 119,756 BTC (about $72 million) to a wallet under his control.
2016 Bitfinex Hack - WikipediaAugust 2016
Bitfinex publicly discloses the breach and halts all trading and withdrawals; bitcoin's price falls approximately 20%.
The Bitfinex Bitcoin Hack: What We Know (And Don't Know) - CoinDeskAugust 2016
Bitfinex applies a 36.067% 'generalized haircut' to all customer balances and issues BFX tokens at 1 BFX per $1 of loss.
2016 Bitfinex Hack - Wikipedia2017
Lichtenstein and Morgan move a large portion of the stolen funds through the darknet market AlphaBay, using it as a bitcoin mixer.
Bitfinex Hack Money Launderers Plead Guilty - ChainalysisApril 2017
Bitfinex announces (April 3) that all outstanding BFX tokens have been redeemed at $1.00 or converted to iFinex equity.
100% Redemption of Outstanding BFX Tokens — Bitfinex BlogFebruary 2022
The DOJ arrests Lichtenstein and Morgan in New York City (February 8) and seizes about 94,000 BTC worth roughly $3.6 billion, then the largest financial seizure in DOJ history.
Two Arrested for Alleged Conspiracy to Launder $4.5 Billion in Stolen Cryptocurrency — DOJMay 2023
OCCRP reports that Bitfinex commissioned and withheld a confidential Ledger Labs report identifying security failures that enabled the 2016 hack.
Confidential Report Flags Bitfinex Security Lapses in Huge 2016 Hack — OCCRPAugust 2023
Lichtenstein and Morgan plead guilty in Washington, D.C. federal court (August 3); Lichtenstein admits for the first time to carrying out the 2016 hack.
Husband and Wife Plead Guilty to Money Laundering Conspiracy - DOJNovember 2024
Lichtenstein is sentenced (November 14) to 60 months in federal prison and three years of supervised release.
Bitfinex Hacker Sentenced in Money Laundering Conspiracy - DOJNovember 2024
Heather Morgan is sentenced to 18 months in federal prison (November 18 per CoinDesk; November 14 per the bitfinex-hack-2016 page).
Bitfinex Hack Launderer Heather 'Razzlekhan' Morgan Sentenced - CoinDesk2025
A U.S. federal court orders in-kind restitution of about 94,000 BTC to Bitfinex through plea-agreement provisions after ruling Bitfinex does not qualify as a 'victim' under the Mandatory Victims Restitution Act.
Bitfinex Hack Update 2025: $9 Billion in Bitcoin to be Returned — BeInCryptoJanuary 2026
Lichtenstein is released from federal prison to home confinement (January 2) after about 14 months, crediting the First Step Act.
Bitcoin Hacker Ilya Lichtenstein Thanks Trump for Early Prison Release - CNBCDecision Log
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- slot 445505725 · hash 9KRy7WBY9D1gLZE8NqmbycTBiiQRFqQ3P5aq1CnEbdtq
- slot 423161877 · hash 7MNDPzGZmZmbfLCWZ4K3862indHEb8yCPfpEJgUDeU8R
- slot 419601692 · hash 3B4T5p5UKB2LCxJCCWX1cFZGuoXCzsohhy9LP15ybLYZ
- slot 419601689 · hash AVxzpX8mavGu59F5oPmmJNBxVZsgShL1GuuPLXGGtZtE
This investigation is cryptographically anchored to the Solana blockchain (6 decisions). 38 of 41 cited source URLs have an Internet Archive snapshot.
model: claude-code-merge-writer
generated: 5/8/2026, 2:31:08 AM
last updated: 10/27/2026, 7:24:18 PM
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