Bitfinex Hackers Move $3.6 Billion of Stolen Bitcoins
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Stolen bitcoins from the 2016 Bitfinex hack are moving. The BTC address that held the
cryptocurrencies
Cryptocurrencies
By using cryptography, virtual currencies, known as cryptocurrencies, are nearly counterfeit-proof digital currencies that are built on blockchain technology. Comprised of decentralized networks, blockchain technology is not overseen by a central authority.Therefore, cryptocurrencies function in a decentralized nature which theoretically makes them immune to government interference. The term, cryptocurrency derives from the origin of the encryption techniques that are employed to secure the networks which are used to authenticate blockchain technology. Cryptocurrencies can be thought of as systems that accept online payments which are denoted as “tokens.” Tokens are represented as internal ledger entries in blockchain technology while the term crypto is used to depict cryptographic methods and encryption algorithms such as public-private key pairs, various hashing functions, and an elliptical curve. Every cryptocurrency transaction that occurs is logged in a web-based ledger with blockchain technology.These then must be approved by a disparate network of individual nodes (computers that maintain a copy of the ledger). For every new block generated, the block must first be authenticated and confirmed ‘approved’ by each node, which makes forging the transactional history of cryptocurrencies nearly impossible. The World’s First CryptoBitcoin became the first blockchain-based cryptocurrency and to this day is still the most demanded cryptocurrency and the most valued. Bitcoin still contributes the majority of the overall cryptocurrency market volume, though several other cryptos have grown in popularity in recent years.Indeed, out of the wake of Bitcoin, iterations of Bitcoin became prevalent which resulted in a multitude of newly created or cloned cryptocurrencies. Contending cryptocurrencies that emerged after Bitcoin’s success is referred to as ‘altcoins’ and they refer to cryptocurrencies such as Bitcoin, Peercoin, Namecoin, Ethereum, Ripple, Stellar, and Dash. Cryptocurrencies promise a wide range of technological innovations that have yet to be structured into being. Simplified payments between two parties without the need for a middle man is one aspect while leveraging blockchain technology to minimize transaction and processing fees for banks is another. Of course, cryptocurrencies have their disadvantages too. This includes issues of tax evasion, money laundering, and other illicit online activities where anonymity is a dire ingredient in solicitous and fraudulent activities.
By using cryptography, virtual currencies, known as cryptocurrencies, are nearly counterfeit-proof digital currencies that are built on blockchain technology. Comprised of decentralized networks, blockchain technology is not overseen by a central authority.Therefore, cryptocurrencies function in a decentralized nature which theoretically makes them immune to government interference. The term, cryptocurrency derives from the origin of the encryption techniques that are employed to secure the networks which are used to authenticate blockchain technology. Cryptocurrencies can be thought of as systems that accept online payments which are denoted as “tokens.” Tokens are represented as internal ledger entries in blockchain technology while the term crypto is used to depict cryptographic methods and encryption algorithms such as public-private key pairs, various hashing functions, and an elliptical curve. Every cryptocurrency transaction that occurs is logged in a web-based ledger with blockchain technology.These then must be approved by a disparate network of individual nodes (computers that maintain a copy of the ledger). For every new block generated, the block must first be authenticated and confirmed ‘approved’ by each node, which makes forging the transactional history of cryptocurrencies nearly impossible. The World’s First CryptoBitcoin became the first blockchain-based cryptocurrency and to this day is still the most demanded cryptocurrency and the most valued. Bitcoin still contributes the majority of the overall cryptocurrency market volume, though several other cryptos have grown in popularity in recent years.Indeed, out of the wake of Bitcoin, iterations of Bitcoin became prevalent which resulted in a multitude of newly created or cloned cryptocurrencies. Contending cryptocurrencies that emerged after Bitcoin’s success is referred to as ‘altcoins’ and they refer to cryptocurrencies such as Bitcoin, Peercoin, Namecoin, Ethereum, Ripple, Stellar, and Dash. Cryptocurrencies promise a wide range of technological innovations that have yet to be structured into being. Simplified payments between two parties without the need for a middle man is one aspect while leveraging blockchain technology to minimize transaction and processing fees for banks is another. Of course, cryptocurrencies have their disadvantages too. This includes issues of tax evasion, money laundering, and other illicit online activities where anonymity is a dire ingredient in solicitous and fraudulent activities. Read this Term has been monitored since the Bitfinex hack. There are speculations the coins were sent to another address in preparation for liquidation or to send tremors through the markets.
First, let’s recap the Bitfinex hack. Bitfinex released the following statement when it discovered 119,796 bitcoins were stolen in 2016 in over 2,000 transactions:
“Today we discovered a security breach that requires us to halt all trading on Bitfinex, as well as halt all digital token deposits to and withdrawals from Bitfinex. We are investigating the breach to determine what happened, but we know that some of our users have had their bitcoins stolen. We are undertaking a review to determine which users have been affected by the breach.”
Where were the Stolen Bitcoins Distributed?
119,796 bitcoins are worth $4.5 billion at the current market price. At the time of the hack, the bitcoins were worth approximately $65 million. The hackers exploited a vulnerability that allowed them to expose Bitfinex’s key. As opposed to MtGox where over 500,000 bitcoins were stolen, Bitfinex remained operational.
Elliptic has been tracking the stolen bitcoins. As of May 2021, only 4% of the stolen coins were laundered. Elliptic discovered the stolen BTC were funnelled into 3 types of actor: darknet markets (84%), privacy wallets (12%) and exchanges (4%).
Hydra has been favoured by cybercriminals due to cash-out services that are offered on the platform. The most notable form of cash-out in Hydra is physical cash in a predetermined location.
Hydra has its own couriers (most of which are women according to Elliptic) that deliver any items to a secret location.
Hydra is the biggest marketplace in the darknet following the collapse of AlphaBay in 2017. In 2020, Bitfinex offered up to $400 million in rewards for the return of the stolen bitcoins:
“Bitfinex is offering a reward to any person that connects us with hackers responsible for the unauthorized transfer of almost 120,000 bitcoins from the exchange in August 2016. As part of the same initiative, Bitfinex is also offering a reward to the hackers themselves for the return of the stolen property.”
An Attempt to Launder?
The BTC address that held the stolen bitcoins sent 94,643 bitcoins (approximately $3.6 billion) earlier today.
Laundering this amount in a short time is near to impossible. There are speculations that the move was aimed to weaken BTCUSD, in which the hackers may profit from while holding short positions prior to moving the bitcoins.
The reason why the movement of Bitnex stolen bitcoins affected BTC is on fear of liquidation. Liquidating a large quantity of bitcoins may devalue BTCUSD in the exchanges. The market reacts despite the fact it cannot be done in such a short time.
BTCUSD dropped from the daily high of $39,000 (approx.) to just under $38,000. At the time of writing, BTCUSD is correcting higher.
Stolen bitcoins from the 2016 Bitfinex hack are moving. The BTC address that held the
First, let’s recap the Bitfinex hack. Bitfinex released the following statement when it discovered 119,796 bitcoins were stolen in 2016 in over 2,000 transactions:
“Today we discovered a security breach that requires us to halt all trading on Bitfinex, as well as halt all digital token deposits to and withdrawals from Bitfinex. We are investigating the breach to determine what happened, but we know that some of our users have had their bitcoins stolen. We are undertaking a review to determine which users have been affected by the breach.”
Where were the Stolen Bitcoins Distributed?
119,796 bitcoins are worth $4.5 billion at the current market price. At the time of the hack, the bitcoins were worth approximately $65 million. The hackers exploited a vulnerability that allowed them to expose Bitfinex’s key. As opposed to MtGox where over 500,000 bitcoins were stolen, Bitfinex remained operational.
Elliptic has been tracking the stolen bitcoins. As of May 2021, only 4% of the stolen coins were laundered. Elliptic discovered the stolen BTC were funnelled into 3 types of actor: darknet markets (84%), privacy wallets (12%) and exchanges (4%).
Hydra has been favoured by cybercriminals due to cash-out services that are offered on the platform. The most notable form of cash-out in Hydra is physical cash in a predetermined location.
Hydra has its own couriers (most of which are women according to Elliptic) that deliver any items to a secret location.
Hydra is the biggest marketplace in the darknet following the collapse of AlphaBay in 2017. In 2020, Bitfinex offered up to $400 million in rewards for the return of the stolen bitcoins:
“Bitfinex is offering a reward to any person that connects us with hackers responsible for the unauthorized transfer of almost 120,000 bitcoins from the exchange in August 2016. As part of the same initiative, Bitfinex is also offering a reward to the hackers themselves for the return of the stolen property.”
An Attempt to Launder?
The BTC address that held the stolen bitcoins sent 94,643 bitcoins (approximately $3.6 billion) earlier today.
Laundering this amount in a short time is near to impossible. There are speculations that the move was aimed to weaken BTCUSD, in which the hackers may profit from while holding short positions prior to moving the bitcoins.
The reason why the movement of Bitnex stolen bitcoins affected BTC is on fear of liquidation. Liquidating a large quantity of bitcoins may devalue BTCUSD in the exchanges. The market reacts despite the fact it cannot be done in such a short time.
BTCUSD dropped from the daily high of $39,000 (approx.) to just under $38,000. At the time of writing, BTCUSD is correcting higher.
