In a significant turn of events, the United States government is poised to compensate Bitfinex, a cryptocurrency exchange that suffered a substantial hack in 2016, resulting in the loss of nearly 120,000 Bitcoin (BTC). This development marks a pivotal moment in the ongoing narrative of the cryptocurrency market’s evolution and regulatory oversight.
Bitfinex Set to Receive 120,000 BTC
Back in 2016, Bitfinex faced a severe cyberattack that led to a loss of nearly 120,000 BTC. To mitigate the impact, the firm initially reduced customers’ funds by 36% to cover the losses incurred. However, in a proactive move to restore customer trust, Bitfinex issued special tokens known as “BFX” in 2017. Additionally, some customers received shares from Bitfinex’s parent company, iFinex, as a form of compensation.
Upon thorough investigation, the United States government has concluded that Bitfinex is the primary victim of the stolen BTC, rather than individual customers who had already been compensated with BFX tokens and iFinex shares. The government report stated, “The government is not aware of any person who qualifies as a victim under the CVRA or for restitution under the MVRA, beyond perhaps Bitfinex, the Victim Virtual Currency Exchange (‘VICTIM VCE’).”
In a significant recovery effort in 2022, US legal authorities managed to seize approximately 95,000 BTC linked to the 2016 Bitfinex hack. The value of these BTC has now surpassed $5.8 billion. Since this seizure, Bitfinex has actively collaborated with the authorities to reclaim these assets, marking a crucial step in their journey to recover from the hack.
Bitfinex’s BTC Compensation and the Impact of LEO Token
The news of potential compensation from the US government had an immediate impact on Bitfinex’s LEO token. Following the government’s announcement, LEO token experienced a dramatic price surge. According to CoinMarketCap data, the token price soared by 14%, climbing from $5.84 to $6.88 within just two hours. However, this rally was short-lived, as the token eventually relinquished all those gains.
Current LEO Token Performance
As of the latest update, LEO is trading at approximately $6.10, reflecting a modest 2% price increase over the past 24 hours. This period also witnessed a significant uptick in trading activity, with trading volume surging by nearly 500%, showcasing heightened interest from both traders and investors. This increase in trading volume underscores the market’s responsiveness to regulatory developments and potential compensations in the cryptocurrency space.
The unfolding scenario around Bitfinex and its potential compensation underscores the complex interplay between cryptocurrency exchanges and regulatory bodies. It also highlights the resilience and adaptability of the crypto market, as stakeholders navigate through challenges and opportunities.
