TL;DR: According to Blockchair.com, some $1.6M worth of Bitcoin Core (BTC) addresses, believed to be tied to the 2016 hack of Hong Kong, Virgin Islands-registered cryptocurrency exchange Bitfinex, were moved on 25 April 2019. The same day, the New York Attorney General announced she’d filed suit against the exchange over missing funds.
More Spice: Bitcoin White Paper Visualized
300 Bitcoin Core (BTC) Addresses Tied to the 2016 Bitfinex Hack Moved, as NY AG Sues
“A cryptocurrency exchange that claims real dollars back its popular digital coin Tether raided those reserves to cover up $850 million that went missing,” the Wall Street Journal reported. Attorney General Letitia James alleges the exchange’s parent company, which also owns stablecoin Tether, has commingled business and user funds to hide wrongdoing. It is ordering the company to cease mixing Tether-related funds and to halt normal operations related to the coin’s distribution. More than half a billion dollars is alleged to have been swiped by the exchange during investigations into its inner workings.
On the same day as the NY AG filing, Reddit user jankeldidi claimed “Bitcoins from the Bitfinex Hack 2016 moved today,” explaining “about 300 BTC from addresses connected to the bitfinex hack were moved,” citing Blockchair and “a spreadsheet which lists the stolen funds.” Bitfinex has become known for its highly publicized hacks, two of which were widely documented. In 2015, the exchange coughed up nearly $400,000 in losses, and in 2016 a whopping $73 million was swiped from users.
READ THE COURT ORDER: here
Questions surrounding the company’s operations haven’t let up, and going into late last year banks outright refused service in some cases due to security concerns. There is also worry about the exchange’s chummy relationship with stablecoin Tether, along with rumors of insolvency and price manipulation which Bitfinex previously denied.
As CoinSpice noted earlier this year, exchange CFO Giancarlo Devasini explained, “Over two years following the  hack of the Bitfinex platform, today we see the results of a clear and robust response strategy and the efforts of the U.S. government,” insisting “27.66270285 BTC have been retrieved from the August 2016 hack and distributed to RRT token holders,” by the US law enforcement.
Analyst Tim Swanson remarked, “Bitfinex: we are totes legit. Also Bitfinex: we privately gave $850m of commingled client deposits to a company we didn’t sign a contract with, they took the money and ran, so we privately pilfered from our own ‘stablecoin’ fund and demonized anyone who questioned the math,” referring to the image above, which highlights the exchange’s dealings with Crypto Capital.
READ THE NY AG FILING: here
Crypto Capital was alleged to have also been involved with missing funds when the CEO of the Canadian cryptocurrency exchange QuadrigaCX died unexpectedly late last year, and some accused Crypto Capital as having made off with tens of millions in that instance as well.
Regarding the overall implications, investor Alistair Milne remained a faint optimistic voice in a barrage of rather damning evidence. “Bitfinex have borrowed ~700mil from Tether,” he posted, “Bitfinex pay a ‘fair’ interest rate on this loan. 60 million shares in Bitfinex were pledged as collateral. If Crypto Capital release the USD, no problem. If Bitfinex trades profitably, no problem.”
DISCLOSURE: The author holds cryptocurrency as part of his financial portfolio, including BCH.
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