The most famous Bitcoin theft: 120,000 BTC vanished, and the hackers eventually got caught!
We continue our journey through the extraordinary world of crypto with a story of hackers, millions of dollars, and exchanges that had to fight for survival.
On August 2, 2016, Bitfinex, one of the best-known exchanges of the time, suffered one of the biggest thefts in Bitcoin history.
The attackers managed to steal approximately 119,755 BTC from the platform. At the time, the blow was devastating, and many thought the exchange would never recover.
But the story was only just beginning.
Behind one of the most famous episodes in the crypto world were Ilya Lichtenstein and his wife, Heather Morgan, who took part in laundering the stolen bitcoins.
For years, they tried to hide the money trail using different methods and transfers between addresses. However, in February 2022, U.S. authorities arrested them and recovered an extraordinary portion of the stolen funds.
In 2023, Lichtenstein and Morgan pleaded guilty to money laundering offenses.
2016 Bitfinex Hack
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What was surprising was how Bitfinex managed to survive the blow.
To compensate its customers, it created tokens called BFX, each representing one dollar for every dollar lost. Within about eight months, everyone affected had either been reimbursed or had the option to convert their tokens into company shares.
Bitfinex Help Center
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But Bitfinex wasn't the only exchange that had to face hackers.
In May 2019, Binance suffered another attack: the criminals managed to withdraw 7,000 BTC, worth around $40 million at the time. The company responded by covering the losses with its SAFU emergency fund, without passing the cost on to users. It then strengthened its security measures.
Binance Blog
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Of course, not everyone had the same fate. Remember Mt. Gox, the exchange that collapsed in 2014 after losing hundreds of thousands of bitcoins. Its downfall became one of the biggest warnings for the entire industry.
Guinness World Records
What I find interesting is that these events forced exchanges to evolve. They improved their security systems, created protection funds, and began paying much more attention to transparency and customer protection.
The question is inevitable: Can we fully trust an exchange with our bitcoins after hearing these stories?
What do you think?
A) Yes, today's exchanges have learned from their mistakes.
B) No, our bitcoins should always remain under our own control.
I'll be reading your comments!
With this, we continue Week 13 of Our Unusual Crypto Universe. Follow me so you don't miss Story #39.