Hacker Steals $20M from US Crypto Wallet

$20 Million Heist! US Government’s Bitfinex Hacker Funds Stolen (Again!)

In a shocking turn of events, a hacker has pulled off a daring heist, stealing $20 million from a cryptocurrency wallet believed to be controlled by the United States government. This wallet held funds seized from the infamous 2016 Bitfinex hack.

What Happened?

On October 24th, the hacker made off with a hefty sum of cryptocurrency, including USD Coin (USDC), Tether (USDT), aUSDC, and Ether (ETH). Arkham Intelligence, an on-chain analytics firm, reported that the stolen funds were transferred to a wallet starting with “0x348.” The hacker is already busy converting the stablecoins (USDC and USDT) into ETH and laundering the money, making it harder to trace.

𝗨𝗣𝗗𝗔𝗧𝗘: 𝗨𝗦 𝗚𝗼𝘃𝗲𝗿𝗻𝗺𝗲𝗻𝘁 𝗹𝗶𝗻𝗸𝗲𝗱 𝗮𝗱𝗱𝗿𝗲𝘀𝘀 𝗮𝗽𝗽𝗲𝗮𝗿𝘀 𝘁𝗼 𝗵𝗮𝘃𝗲 𝗯𝗲𝗲𝗻 𝗰𝗼𝗺𝗽𝗿𝗼𝗺𝗶𝘀𝗲𝗱 𝗳𝗼𝗿 $𝟮𝟬𝗠.

$20M in USDC, USDT, aUSDC and ETH has been suspiciously moved from a USG-linked address 0xc9E6E51C7dA9FF1198fdC5b3369EfeDA9b19C34c to… pic.twitter.com/UXn1atE1Wx

— Arkham (@ArkhamIntel) October 24, 2024

A Quick Recap of the 2016 Bitfinex Hack

Remember the massive Bitfinex hack back in 2016? Ilya Lichtenstein and his wife, Heather Morgan, were arrested in 2022 for stealing a whopping 120,000 Bitcoin (BTC) – worth around $8.2 billion today.

Funds Flow Through Exchanges and Wallets

The attacker’s movements suggest a meticulously planned effort to obscure the trail of funds. Soon after the initial transfers, approximately $320,000 in Ethereum was distributed across several exchanges, while smaller sums, totaling around $80,000, were sent to multiple minor wallets.

On-chain analytics firm Lookonchain observed that 148 ETH (worth roughly $372,600) was transferred to ten different Binance deposit wallets. This strategic move hints at an attempt to blend the assets for a potential cash-out.

Hackers attacked #USgovernment wallet and stole ~$20.7M!

Including:
13.7M $aUSDC
5.44M $USDC
1.12M $USDT
178 $ETH($447K).

Notably, hackers transferred 148 $ETH($372.6K) to 10 #Binance deposit wallets.https://t.co/erV5T8x6eU pic.twitter.com/kczyEbLJnE

— Lookonchain (@lookonchain) October 25, 2024

This latest heist adds another layer of complexity to the already intriguing case. Lichtenstein and Morgan are scheduled to be sentenced in November. In a plea deal, Lichtenstein admitted to being the mastermind behind the 2016 hack. Prosecutors are recommending a reduced sentence of five years for Lichtenstein and 18 months for Morgan due to their cooperation with law enforcement.

Why This Matters

This incident raises serious questions about the security of government-held cryptocurrency. If a wallet supposedly under the control of the US government can be hacked, it highlights the vulnerability of digital assets, even in seemingly secure environments.