Hacker Returns Stolen Funds to US Government Wallet: Report

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Hongji Feng

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Hongji Feng

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Hongji is a crypto and tech reporter. He graduated from Northwestern University's Medill School of Journalism with a Bachelor's and a Master's. He has previously interned at HTX (Huobi Global),...

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October 25, 2024

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In a Friday report, a hacker returned approximately $6.1 million worth of stolen digital assets to a US government wallet following a significant breach earlier in the day.

As detailed in a post from Onchain Lens, the hacker sent back around 13.19 million $aUSDC and 2,408 ETH, with valuations based on data from Arkham Intelligence.

US Government Crypto Wallet Breach: Hacker Steals $20.7 Million

Just hours before the partial return of funds, the US government crypto wallet had been breached, leading to the theft of over $20.7 million in digital assets.

Among the stolen cryptocurrencies were 13.7 million $aUSDC, 5.44 million $USDC, 1.12 million $USDT, and 178 ETH, collectively valued at $447,000.

After the theft, the hacker swiftly converted $7.06 million of the stolen stablecoins into 2,764 ETH, achieving an average price of $2,555 per ETH.

Of the converted ETH, 195.4 ETH, worth about $493,000, was then transferred to Binance deposit addresses.

Before returning a portion of the assets, the hacker held 13.17 million $aUSDC and 2,747 ETH, distributed across three separate wallets.

How the US Government Came to Hold Seized Bitfinex Funds

This government-controlled wallet held part of the 120,000 Bitcoin seized from the 2016 Bitfinex hack.

During that incident, hackers Ilya Lichtenstein and Heather Morgan allegedly stole billions in Bitcoin, marking a major event in crypto history.

Later, U.S. law enforcement recovered a substantial amount of these funds, resulting in one of the largest crypto seizures ever recorded by the Department of Justice.

Earlier in July, the government moved 29,800 Bitcoin—about $2 billion in value—from Silk Road seizures to an undisclosed address, contributing to its total Bitcoin holdings of 179,155 BTC, then valued at approximately $12.14 billion.