Crypto Weekly: Unravelling a $3.6bn exchange hack

$3.6bn in Bitcoins seized

In 2016, one of the largest crypto exchanges at the time, Bitfinex, was hacked for 119,754 Bitcoins, worth around $72 million then. For years, the hackers have laundered some of the funds, but the majority has been kept at the over 2,000 Bitcoin addresses, which the funds were sent to following the hack. On the 1^st of February, though, these remaining 94,643 Bitcoins were transferred to a single address over the span of one and a half hours. This was rather unexpected since the prior laundering was done somewhat sophisticatedly with minor amounts each time. Around a week later, on the 8^th of February, the answer came to why the funds were moved. According to the U.S. Department of Justice, the US authorities had seized the amount and arrested a married couple on charges that they conspired to launder proceeds from the Bitfinex hack. The US authorities stated that they came across the couple in its pursuit to allegedly launder the Bitcoins. Following this, the execution of a court-authorized search warrant of online accounts belonging to the couple led the authorities to find an encrypted file in the man’s cloud storage counting over 2,000 addresses and their corresponding private keys associated with the hack, which empowered the seizure. The couple has not been charged for the exchange hack itself.

Following the press release, the crypto market declined slightly in value as investors expect the 94,643 Bitcoins to be liquidated at some point in the future. However, in our view, the seizure is fairly positive for the market as a whole because it shows that crypto is not a safe haven for criminals to operate in. This highly publicly covered case should frighten criminals and encourage the authorities to spend more resources on crypto, and with better analytical software and know-how in the future, it should become more complicated for criminals to operate in the space.

MasterCard to push further into crypto

The global payment provider MasterCard has today announced its intention to hire more than 500 employees in its consulting business named Data & Services, which already counts over 2,000 employees. The hiring sprint is partially dedicated to the division’s focus within crypto consulting, which stresses that there is an increasing demand for such services. Alongside Visa, MasterCard has been keen on crypto for some years, leading the company to recently acquire crypto analytics software CipherTrace and to partner with Coinbase in regard to its upcoming NFT platform.

The crypto bowl