While we were busy with Bitcoin analysis and price forecasts, a lot was also happening in the area of Bitcoin cryptocurrency. We discuss the Bitfinex hack and see how hackers made someone rich. Furthermore, we saw arguments over lost BTC and the BBC was (almost) victim of a Bitcoin scam.
For fans of cryptocurrency and exciting stories, there was plenty to enjoy with Bitcoin. We list the most important events.
Questions after transfer Bitfinex hack Bitcoin
In 2016, there was a huge hack at Bitfinex. Here, billions of Bitcoin were stolen. Earlier this week we reported that these BTC left their hiding place. This transaction killed a couple from New York. In fact, they were arrested shortly after the transaction and have since been arraigned for the theft and laundering of billions in Bitcoin. This arraignment made the world press. The case also received attention in the Netherlands. Yet there are still many unanswered questions. In addition, of course, the question is to what extent investors will get something back from the billions found. We list some of the issues.
Did these influencers also commit the Bitfinex hack?
Anyone who looks closely at the subpoena will see that the two defendants are convicted of theft and money laundering of the loot, but not of the hack itself. So we cannot say that the hackers were caught. During the trial it will become clear whether the FBI is still holding their cards up because they are looking for evidence or whether more people may be involved and others may have committed the hack.
Is the entire Bitfinex BTC loot now found again?
This answer is simple and reads “no. It is expected that the suspects have access to at least another $330 million in crypto coins and in addition, some of the loot is gone. A total of 121,256 BTC were seized and 94,000 BTC have now been recovered. So the search for 27,256 BTC is still on. There is every reason to do so, because Bitfinex is offering a reward of 30% of the value for anyone who returns the stolen crypto to Bitfinex.
Will the US government return the Bitcoins it finds?
This question is easier asked than answered. Of course, immediately after it was known that 94,000 BTC had been secured, Bitfinex claimed the loot back. In practice, this does not work so easily. In principle, the U.S. government pays seized money and goods to the victims. If they cannot be traced, they keep the confiscated loot. It can then finance new operations or sell the loot. So the first question is who is the victim? Is this Bitfinex (the platform where the hack took place) or are these the customers of the exchange (after all, their crypto assets were stolen). We look at both scenarios.
Before we do that, we note that the government has of course also incurred and will incur costs for the seizure, prosecution and (perhaps) detention of the perpetrators. It will want to recover these somewhere anyway, so those costs will most likely be subtracted from the loot. After that, then, the question is who is eligible to be paid. Bitfinex, its customers or the US government.
Problems for Bitfinex with Bitcoin
If one comes to the conclusion that Bitfinex is the victim and therefore entitled to a refund there is the next problem. This is because Bitfinex is not registered in America but in the Virgin Islands. In addition, there are a number of cases pending worldwide with governments accusing Bitfinex of not having acted in accordance with the rules. There are also various scandals in America.
So there is a good chance that if Bitfinex is eventually designated as the rightful claimant, the money will remain in the custody of the U.S. government as long as the other cases are ongoing. Other countries may also seize the money. After all, once the BTC are back in the Virgin Islands, collecting the money that may have to be paid based on lawsuits will be difficult.
Aren’t the duped investors entitled to the recovered Bitcoins?
The crypto coins stolen from Bitfinex were not the property of the exchange, but of customers who kept their coins on that exchange. This raises the question of whether the recovered loot should not be returned to the customers. In practice, that question also proves more difficult to answer than thought.
Have the Bitfinex hack victims been compensated?
When the hack took place in 2016, 34% of the customers said goodbye and the Bitcoin price dropped by 20%. So action had to be taken to regain customers’ trust. Bitfinex energetically did just that. The losses were converted into dollars and each customer was given a choice of compensation options. With that, you could argue that the customers thus did not suffer any damage.
However, this is too short-sighted according to some. They argue that Bitfinex actually underpaid because, of course, Bitcoin has increased in value tremendously since 2016, while being compensated for the value at the time. Moreover, one of the options for compensation was a voucher that would also compensate for the increase in value if loot was recovered.
Who are the duped Bitfinex customers anyway?
Moreover, there is another problem at play. In 2016, Bitcoin was a lot more anonymous than it is today. Should the U.S. government decide to pay back money, it would obviously want to: a. Be sure to pay to the right people, and b. Be sure that those people do not have (tax) debts to the U.S. government.
Bitfinex, however, did not have a KYC (know your customer) policy at the time. Thus, the aggrieved are anonymous. With this, even if the money should go to the customers, the question is how to arrange that. After all, simply refunding via Bitfinex to the affected wallets does not provide any certainty about the owner of the wallets.
So is the U.S. government entitled to the Bitfinex Bitcoins?
That too is the question. The hack did not take place in America and it is known where the Bitcoins were stolen. Moreover, in connection with anonymity, it cannot simply be said that American citizens suffered damage.
Given that billions are involved in these questions, the trial of the arrested suspects will be very interesting for many reasons. We will therefore continue to monitor developments.
By the way, if you are curious how much the loot is worth now, you can of course always analyze the live BTC price and crypto prices on the site of Tradeincrypto.com.
Hackers can also return Bitcoin, but beware!
Before this, we saw how hackers can do enormous damage. However, the American Rhona can testify that hackers can also do good things with Bitcoin. She bought 6 Bitcoin in 2013 for about $80 each. She then spent some of this, but over time she forgot about her investment, until in 2017 she read in the media that the BTC had skyrocketed in value. So she went looking and found the data from her wallet again, but…
These turned out to be incomplete and with that, her BTC seemed to be gone forever. This changed when she got in touch with the company Crypto Asset Recovery. They managed to hack into the wallet. It turned out there was still $ 175,000 present in the wallet. The hackers got their reward of 20% of the loot and Rhona was suddenly filthy rich.
Of course, this is a great example of an ethical hacker, yet working with hackers is extremely dangerous. For example, once a hacker has access to your wallet, he can do whatever he wants with the contents. Thus, if he is not of good will you have lost your money permanently.
In addition, criminals use a notorious scam trick called the “double scam. First they empty your wallet (e.g. by phishing). After some time you will receive a call from someone from an ‘investigation service’. They will tell you that they have arrested a gang of fraudsters and that they found in the documents that you were the victim. They can then claim your assets back by hacking into the crooks’ wallets, but there are costs involved and you have to pay those up front. If you fall for it, you have unfortunately been swindled twice by the same crooks.
If you want to avoid becoming a victim of crypto crooks it is good to take precautions. These 5 tips against cryptocurrency might help.
Bitcoin quarrel in Israel
Mrs. Freeman bought Bitcoin for $3,000 cash from someone 9 years ago. Last year she sold the coins and made a profit of $320,000. She thought to deposit this money with her bank, the Hapoalim Bank. However, Israel’s largest bank refused to accept the money. A difference of opinion arose over this and Mrs. Freeman has since filed a lawsuit.
The bank is not shocked by this and defends itself by arguing that Freeman cannot prove that she bought the Bitcoin at the time in the manner she says. Nor can she show that there was (was) no money laundering or terrorism with the purchase and sale, so the bank doesn’t want to get its fingers burned. Of course, many banks from other countries are also looking at how this case will play out.
BBC almost kicks in Bitcoin scam
Last Wednesday, Hanad Hassan was to make his appearance on the BBC program “The Crypto Millionaire. His story is therefore extraordinary. During the lockdown, he had set up the crypto currency OrfanoX for about EUR 40. In addition to his studies and two jobs, he saw the opportunity to find many investors. By now he had earned more than a million dollars and had quit both his studies and his jobs.
When the BBC announced the story, something unexpected happened. Masses of investors came forward with the story that both Hassan and his crypto currency had disappeared in October 2021, that investors had lost their money and that they suspected they had been tricked into a scam. The BBC was only just able to prevent the broadcast. With an appeal to “editorial issues” they could just prevent an enormous scam.
Of course we will continue to follow these developments and the prices of Bitcoin and other crypto currencies in the coming week. For now, have a nice weekend!
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