Hackers Target US Government Wallet, Seize $20M in Stolen Bitfinex Assets

Crypto security incidents remain a persistent challenge, with September alone seeing $120 million in losses from various hacks.

Over half of these were linked to attacks on centralized exchanges BingX and Indodax. Amid this trend, Arkham Intelligence reported a recent breach involving a wallet thought to be under U.S. government control, with a loss of $20 million on October 24.

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

The funds included assets from the infamous 2016 Bitfinex hack, totaling $5.5 million in USDC, $1.25 million in Tether, $13.7 million in interest-bearing USDC, and $446,000 in Ethereum.

The hacker is believed to be converting the stolen stablecoins into Ethereum, using a series of transfers tied to suspected money-laundering addresses. Notably, some of these transactions were routed through a “nested exchange,” a liquidity hub associated with Binance but not directly involving the platform.

This incident recalls the 2016 Bitfinex breach, orchestrated by Ilya Lichtenstein and Heather Morgan, who were accused of stealing 120,000 Bitcoin, now valued at over $8 billion.

After being detained in 2022, both reached a plea deal this past July. Lichtenstein faces up to five years in prison, while Morgan has requested an 18-month sentence, with sentencing expected this November.