Bitfinex Hacker Will Need 114 Years to Completely Launder Stolen Bitcoin Worth $7 Billion

Bitfinex Hacker Will Need 114 Years to Completely Launder Stolen Bitcoin Worth $7 Billion

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Bitfinex Hacker

Elliptic, a blockchain analytics company, alleged that hackers behind Bitfinex hack in 2016 need over a century to launder stolen Bitcoin from Bitfinex.

Approximately 120,000 BTC, worth about $7 Billion today, got stolen in the Bitfinex hack.

According to Elliptic, the hackers have managed to cash out only about 4 percent of the total bounty from the Bitcoin hack.

The Bitfinex hackers have only moved about 21 percent of the total Bitcoin holdings while 79 percent have not moved from the original wallet.

How Bitfinex Hackers Laundered Stolen Bitcoin

Initially, the hackers allegedly moved Bitcoin through three channels: the dark web, privacy wallets, and exchanges. The dark web accounted for most of the BTC moved. Crypto exchanges accounted for about 4 percent of BTC moved.

In 2017, the hackers used the Alphabay dark web platform to launder the stolen BTC. Law enforcement later shut Alphabay, prompting the hackers to shift to Hydra in the same year. Elliptic estimates that the hackers have sent about $72 million worth of Bitcoin to Hydra to date.

The hackers largely kept their activities at a bare minimum in the following years. They resumed moving the crypto hack bounties in November 2020 and April 2021, probably fueled by the skyrocketing Bitcoin prices.

Elliptic further revealed the privacy wallets the hackers use to avoid tracking the stolen Bitcoin. Initially, the hackers used the JoinMarket wallet and later shifted to Wasabi wallet.

New Protocols Slows Down Laundering

In the early days following the Bitcoin hack, the hackers found loopholes to launder through exchanges. For example, the Bitfinex hackers used peeling chains to offset a small portion of Bitcoin as they move from wallet to wallet. They secretly transferred the small BTC portions to their actual destination for laundering.

However, the introduction of new softwares such as Elliptic Forensics has made it possible to track the source and the destination of Bitcoin as they move within the DeFi space. In addition, security protocols such as KYC ensure crypto wallet holders’ identities are known.

The Bitfinex hackers have managed to launder only about $10 million worth of Bitcoin. They allegedly send about $1 million BTC to Wasabi’s wallet every month. At this rate, Elliptic predicts that it may take the Bitfinex hackers 114 years to launder the $7 Billion worth of stolen Bitcoin from Bitfinex.

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