The US Department of Justice (DOJ) has said that about $9 billion in Bitcoin, taken from the crypto exchange Bitfinex in 2016 hacking eventshould be returned to the exchange.
This claim stems from a legal document filed by the DOJ, which showed that there are no known victims in this particular case within the existing legal structure.
Bitfinex to recover stolen Bitcoin
The court documentsfiled on Tuesday, explain that the recovery of the stolen Bitcoin – specifically 94,643 BTC, along with amounts from various hard forks – should be returned to Bitfinex.
The DOJ argued that under the Mandatory Victims Restitution Act (MVRA), there is no legal basis to classify Bitfinex or its accountants as victims of specific crimes for which the defendants were convicted.
The defendants, Ilya Lichtenstein and Heather Morgan, were convicted of money laundering conspiracy, but crucially, they were not charged with the first hack that led to the theft of Bitcoin.
According to the DOJ, their subsequent actions did not cause the losses they incurred Bitfinex. The legal definition of “victim” as stated in the MVRA requires direct and proximate harm as a result of the commission of a specific crime, which this case allegedly does not.
Legal challenges in crypto asset recovery
The DOJ filing emphasizes that while mandatory restitution cannot be ordered under the current convictions, the court retains the authority to award voluntary restitution.
This means that as part of their plea agreements, the defendants have agreed to return the stolen assets to Bitfinex. The reinstatement order the DOJ would seize all assets recovered from the Bitfinex Hack Wallet.
While this decision points to a possible financial situation for Bitfinex, it also opens the door for further legal complications. The government is currently proceeding with third-party forfeiture to address other assets seized in connection with the defendants' money laundering activities.
These additional funds, which were involved in complex laundering schemes, may not be classified as specific property lost by Bitfinex and its accountants.
The 2016 Bitfinex hack, one of the largest in cryptocurrency history, has had a lasting impact, leading to ongoing debates about regulatory standards and victim resettlement in the digital asset space.
As this situation develops, the parties involved in the case will be focused on the final decision of the court on the return of seized Bitcoin and its impact on the future cryptocurrency regulation and renewal methods for future issues.
The DOJ's efforts are aimed not only at addressing the financial losses suffered by Bitfinex but also at clarifying the legal ramifications associated with the theft of digital assets.
At the time of this writing, Bitcoin has been able to recover its support movement with a 4% increase in the last 24 hours towards the $99,100 level.
Featured image from DALL-E, chart from TradingView.com
