Bitfinex offers up to USD400m reward for return of stolen 2016 bitcoins

Submitted 04/08/2020 - 5:11pm

Digital asset trading platform Bitfinex is offering a reward to persons that connect the exchange with the hackers responsible for the unauthorised transfer of almost 120,000 bitcoins from the exchange in August 2016. 

The hackers themselves will also be rewarded for returning the stolen property. A total reward pot of approximately USD400 million is available as part of the exchange’s efforts to reclaim the stolen property.

After the identity of the hackers is confirmed, the persons establishing contact with the hackers will be rewarded. The hackers will be paid upon return of the stolen bitcoin. Those who put Bitfinex in contact with the hackers will receive 5 per cent of the total property recovered (or equivalent funds or assets at current market values) and the hackers will receive 25 per cent of the total property recovered (or equivalent funds or assets at current market values). Any payments made to those connecting Bitfinex will work to ensure this can be done securely, thereby protecting the identities of all parties, and Bitfinex reserves the right to impose conditions on any transfers in order to verify claims and ensure a secure process.

The aggregate rewards available under this programme could be worth up to approximately USD400 million at the current BTC price if all bitcoins are fully recovered. The bitcoins stolen minus recoveries in 2019 are worth USD1.344 billion today, with 30 per cent of that amount equal to USD403,288,427.

“We will reward anyone with information that can put us in direct contact with those responsible for the 2016 security breach at Bitfinex,” says Paolo Ardoino, CTO at Bitfinex. “The hackers will receive a share of the returned property.”

On 2 August, 2016, hackers breached Bitfinex’s security systems. Subsequently, 2,072 unauthorised transactions (representing BTC119,755 in aggregate) were broadcast on the Bitcoin network, resulting in the loss. 

“As the recent hack of Twitter demonstrates, the threat posed by maliferous hackers remains,” says Ardoino. “We urge all exchanges, investors and stakeholders in the space to remain vigilant and to work together to counter the threat that hackers pose to the digital asset industry.”

An investigation into the 2016 Bitfinex hack by law enforcement is continuing. Bitfinex has addressed the specific security issues and vulnerabilities, and has made a comprehensive upgrade of the security measures in place at the exchange. Starting in 2016 after the security breach, Bitfinex again assumed full control of assets held on the exchange, deploying a cold wallet solution. Bitfinex no longer uses any third party custody services for the management and custody of customers’ digital tokens.

As part of Bitfinex’s recovery plan from the unauthorised breach, the exchange provided BFX tokens to all affected users. Each token represented USD1 of losses. Those BFX tokens started trading on Bitfinex at less than USD0.20, and gradually increased in value to almost USD1. Monthly redemptions began on 1 September, 2016, and the last BFX token was redeemed at the beginning of April 2017. More than 52 million BFX tokens were converted to shares of iFinex Inc at 1:1 tokens to shares.

Tags Cryptocurrency