US govt. says Bitfinex could be the sole victim in 2016 hack, but asks court to open a pathway for customers' claims

Bitfinex could be the only victim after it was hacked in 2016 by Ilya Lichtenstein and Heather Morgan, the U.S. government said in a recent filing.

"The government is not aware of any person who qualifies as a victim under the CVRA [Crime Victims' Rights Act] or for restitution under the MVRA [Mandatory Victim Restitution Act], beyond perhaps Bitfinex…" the U.S. Attorney for the District of Columbia said in the filing.

Lichtenstein and Morgan, as well as Bitfinex parent company iFinex, have asserted that the crypto trading platform is the sole victim, the government said in the filing.

After the hack, iFinex said customers were able to sell Bitfinex-issued tokens called BFX on the market or back to the platform for cash or iFinex stock, among other options, according to the filing.

"All customers holding BFX tokens chose to exercise one of those options, and as of April 3, 2017, all BFX tokens were fully redeemed," the filing said. 

However, the government said it was "out of an abundance of caution" wants to give Bitfinex accountholders an "opportunity to advance potential claims" ahead of sentencing. The government asked on Tuesday for the court to allow it to use different types of notification methods, including the Department of Justice's website.

The pair, Lichtenstein and Morgan, who also goes by her rapper name “Razzlekhan," pleaded guilty in August 2023 to money laundering conspiracy in connection with the hacking of Bitfinex in 2016. The two allegedly conspired to launder 119,754 bitcoin tokens in August 2016, which at the time was valued at close to $71 million, according to the government.

Morgan was arrested with Lichtenstein last year and charged with conspiracy to commit money laundering and conspiracy to defraud the U.S. Notably, prior to her arrest Morgan also gave advice on how to protect businesses from cybercriminals and how to more effectively socially engineer — a hacking term — "your way into anything."

Sentencing for Lichtenstein is scheduled for Nov. 14 and Nov. 15 for Morgan.

The LEO +8.92% token, which was created by Bitfinex, spiked up more than 50% on Wednesday morning and was trading higher by around 10% over the past 24 hours at publication time, according to The Block's price page .