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Bart dfadf - 23 March 2022

$3.6 bln in Bitcoin seized from Bitfinex 2016 hack

In 2016, Bitfinex became the victim of a hack which resulted in hackers stealing a significant portion of the exchange’s Bitcoin holdings. After all this time, there have finally been some major developments surrounding the case which has even led to the arrest of the two supposed hackers that are responsible for the attack. 

The hack

During the hack of 2016, 119,754 Bitcoins were stolen, worth about $71 mln at the time. The funds were idle and all associated addresses were tracked and blacklisted, making it difficult to cash out the funds. On the 1st of February, it was reported that some of these Bitcoins started to move. Exactly a week later, news has come out that the US government has seized a significant portion of the hacked coins and has arrested two people who have been accused of being behind the attack. The persons will appear in Federal Court about the matter. 

As the Bitcoin price has skyrocketed since the hack, the funds are worth a lot more. In total, the hack which was worth $71 mln in 2016 is currently worth around $4.5 bln, $3.6 bln of which has already been seized by authorities. 

Hacks and exploits will remain an issue

Hacks have plagued the crypto industry for a long time. Although the major centralized exchanges are doing a lot better when it comes to security compared to 2016, DeFi has had major issues with hacks and exploits as well. The most recent major exploit occurred at the beginning of February. Wormhole, a popular cross-chain bridge, was exploited which resulted in $320 mln worth of wETH being stolen. 

What to do against it

Unfortunately, these hacks will remain a part of crypto as it is impossible to eliminate all of the possible security flaws. The best thing that users can do to protect themselves against these hacks and exploits is by spreading out capital on different platforms and looking at insurance providers such as Nexus Mutual. 

An increasing number of these insurance providers are also starting to offer coverage for centralized exchanges. However, if you are with the bigger exchanges like Binance, the risks of losing capital due to an exchange hack are quite minimal as they have their own safety buffer as well.