The 2016 Bitfinex hacker moved more than 2,000 BTC on October 7, according to Whale Alert.
Whale Alert revealed that the funds were moved in a total of seven separate transactions ranging from $4.18 million – $4.85 million and just one transactions involving BTC worth about $12,400.
Bitcoin became famous following the massive Mt. Gox hack of 2014. Two years later, in August 2016 Bitfinex cryptocurrency exchange revealed some devastating news in the young history of bitcoin. The Hong Kong-based exchange announced that hackers managed to successfully penetrate its security protocols and made away with a total of 119,756 bitcoin worth $72 million then.
At the prevailing market prices, the stolen Bitfinex bitcoins are worth a staggering $1,274,527,181. Back then, Bitfinex was a major crypto exchange that operated with the United States dollar, meaning almost everyone conversant with bitcoin held an account there. After Bitfinex announced the news of the biggest robbery in the industry since Mt. Gox, the value of bitcoin dropped by 20 percent, to nearly $480 before initiating a pullback.
$26 million of stolen Bitfinex BTC moved
It is typical of hackers to move funds in small portions to help wash the stolen money through less regulated cryptocurrency exchange platforms. Furthermore, another reason for moving funds through small batches is to avoid the risk of the massive loss in case the funds are seized by authorities.
This is not the first time the Bitfinex hackers have moved their ill-gotten funds across the bitcoin network. Earlier this year, they transferred over $25 million in stolen BTC through 20 transaction batches ranging from $149,000 to over $300,000. To date, the perpetrators have moved between 1-3 percent of the stolen Bitfinex chunk with the holding strategy seemingly bearing fruits.
Should bitcoin traders be concerned?
Bitcoin traders and HODlers should be concerned about the movement of the ill-gotten tokens. The potential effects of the funds finding their way back into the market could be catastrophic. Notably, stolen tokens take away tokens from the circulating supply, sometimes for a long period, before introducing them back through mixers or less regulated exchange platforms.
The abrupt movement of the stolen bitcoin funds risks pulling down the price of bitcoin by adding fresh tokens to the current flow. Furthermore, the Mt.Gox trustee is expected to submit a rehabilitation plan later this month regarding the issuance of 140,000 bitcoins left for the victims of the infamous Mt.Gox hack of 2014. The entry of the fresh tokens into the market has sparked fears of an increased sell-off.
Notably, in August 2020 after the hackers moved a substantial amount of the stolen bitcoin, Bitfinex crypto exchange through an official statement vowed to reward any endeavor leading to the recuperation of the tokens.
Although the hack in 2016 dealt the company a huge blow, Bitfinex managed to rally on unlike Mt. Gox which shut down shop. Their particular treatment of the outcomes of the hack played a huge role in their triumph and it beggars belief that Bitfinex managed to get back on its feet after just a few months.