US Government Blockchain Wallets Linked to the 2016 Bitfinex Hack Were Compromised, $20M in Crypto Stolen

Blockchain intelligence firm Arkham reported that blockchain wallets linked to the US government and containing $20 million worth of crypto, had been compromised.

Blockchain wallets linked to the US government and containing US$20 million worth of crypto have been compromised, according to a report by blockchain intelligence firm Arkham on October 24th. The wallets are identified in official court documents, lending credence to Arkham's claims. The original US government wallet was linked to seizures made in connection with the 2016 Bitfinex hack.

The wallets linked to the US government mysteriously transferred US$20 million in USDC, USDT, aUSDC, and ETH funds to a new random wallet, according to the report. A US$5.4 million transfer was the first activity observed from the government-tied wallet in 8 months, setting off alarm bells. After the initial transfers, whoever controlled the new wallet attempted to launder the funds through various DeFi protocols and exchanges, providing further circumstantial evidence of the hack.

In 2022, a married couple was accused of attempting to launder over US$4 billion in Bitcoin that was stolen during the 2016 Bitfinex crypto exchange hack. The U.S. government stated that it ultimately seized around $3.6 billion in assets from the couple, marking the largest financial seizure ever, crypto or otherwise.

The pair, Ilya Lichtenstein and Heather Morgan, are accused of conspiring to launder 119,754 Bitcoin that was stolen by a hacker who breached the centralized exchange Bitfinex. “In a futile effort to maintain digital anonymity, the defendants laundered stolen funds through a labyrinth of cryptocurrency transactions,” the Deputy attorney general stated in a statement.