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Bitfinex has confirmed that 876.82084947 stolen bitcoins have moved with Scorechain, a Bitcoin and Blockchain compliance & regulations firm, publicly stating 153 BTC, worth around $137,000, was moved on January the 25th and another 723 BTC, worth around $800,000, moved overnight. Chris Ellis, a Bitfinex Community Liaison employee, publicly stated:

“The hacker transferred the coins… to a variety of exchanges, some well known… Right now it looks like they are testing to see how different exchanges react to these initial small deposits.”

Drew Samsen, Applications Team Leader at Bitfinex, told CCN that it appears coins have been moved to LocalBitcoins, Xzzx, BTC-e, Bitcoin.de, Coinbase, Kraken, CoinsBank and quadrigaCX. He further stated that Kraken has frozen 0.4BTC, but it is not clear whether some of the other exchanges will follow suite.


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Samsen told CCN:

“Many exchanges and bitcoin services are tracking the coins step by step as they move to new addresses, and we can identify if the coins end up on an exchange. We have a lot of companies cooperating to help track. Every time the coins move it is another data point for analysis, more information, that can help find the hacker.

Bitfinex has publicly stated they will offer a 5% bounty “on every BTC recovered,” translating to around $50,000 for the bitcoins on the move and more than $5 million if the entire hacked sum is recovered. The bounty is offered to everyone, including the hacker, according to Samsen:

“[W]e are willing to pay the bounty in a currency other than BTC. For example, if they want the bounty to not be trackable, they can request payment in Monero or some other privacy-centric currency. We are willing to cooperate to what they need.”

Bitfinex was hacked out of almost 120,000 bitcoins, now worth around $110 million, on or around August the 2nd. The full details have not yet been publicly revealed, but Samsen says:

We know generally how it happened. It was the work of a profession[al] (or team) over several months who expertly covered his tracks. We have worked with 3rd parties to do memory analysis and have had security audits and are preparing a progress report soon.

Despite suffering one of the biggest theft in the world, the exchange continued operations, converting the loss, which amounted to a very precise 36.067% of total customer’s holdings, into BFX tokens to be redeemed out of the exchange’s profits. Samsen said:

“Users who experienced a loss received the equivalent value in a placeholder “BFX token”. We then opened up investment opportunities that allows over 300 customers to convert their tokens to equity in Bitfinex and become shareholders. Also we are using operating profits to “redeem” a portion of the tokens approximately every month – converting the tokens back into USD balances for the users. Over half the tokens are now redeemed.”

If that is indeed the case, then it may be somewhat impressive considering the huge theft, but the exchange remains unregulated, still does not list its personnel on their webpage, has not yet published any independent audit from a reputable firm and is still preparing a report on the hack.

The details of the exchange’s personnel are of particular relevance as there was some confusion following the theft regarding the precise names of Bitfinex’s CEO, founder, directors and even the whereabouts of the company’s offices, which led to concerns regarding the remainder of the funds. Nonetheless, if they have indeed returned some 60,000 bitcoins or their monetary equivalent (which we have not independently confirmed), then perhaps they might retain some trust, especially now that they are one of, if not the only, exchange that provides margins trading following PBOC’s order to Chinese exchanges to stop offering futures and margins.

Image from Shutterstock.

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