Two Arrested in Connection With the Infamous 2016 Bitfinex Hack

Bitfinex is a peer-to-peer Bitcoin exchange, offering digital asset trading services to users around the world. It was founded in 2012 and Bitfinex had then started as a P2P margin lending platform for Bitcoin and later added support for more cryptocurrencies. The first hack on the platform was in May 2015 when 1500 bitcoins were stolen. Following was, what is regarded as the second largest bitcoin theft after Mt. Gox breach in early 2014, in August 2016 when $72 million in bitcoin was stolen from the company’s customer’s accounts. Bitfinex officially announced that day that it suffered a security breach resulting in the theft of 119,756 BTC.

In connection to the incident, two brothers, Eli and Assaf Gigi have been arrested by the Israeli Police cyber unit. The brothers have been alleged to be the perpetrators of a multi-year phishing scheme and participating in a 2016 hack of Bitfinex. Reports from an Israeli news outlet, Ynet indicates that they stole over $100 million in cryptocurrency.
31-year-old Eli, and 21-year-old Assaf, asides charges for the Bitfinex hack, had allegedly constructed a phishing scheme that involved luring investors from crypto trading forums, such as Telegram or Reddit, onto websites that mimicked prominent crypto exchanges. That enabled them access to the traders’ login and wallet information, which they then used to transfer the funds stored on legitimate exchanges to their own accounts.
Police also allege that dropping links to wallet management software that once downloaded would allow access to the victim’s funds, was a tactic they used amongst others. Reportedly the Israeli police raided Eli’s house and one of his crypto wallets was seized, although it contained less than the suspected total of stolen funds. They also found two luxury cars.

Prior to the Gigi brothers’ arrest, the stolen bitcoin had been lying dormant for three years till earlier this month, some of them were recorded moving from wallets connected with the hack. The majority of compromised accounts were from users in the U.S. and E.U. Bitfinex announced that some of the stolen bitcoin – 27.66270285 – were returned after being retrieved by the U.S. government in February. This was all following reports from Israeli crime news portal, Posta that several cyber units across the globe were cooperating in an effort to retrieve the missing funds. Investigations started since 2017 and are still ongoing.
Any wonder as to how the criminal duo could have pulled such huge impact thefts? Well, the older of the Gigi brothers is a former computer science expert in the IDF, speculated to be the largest military branch in the Israeli army, that specializes in hacking, spying and creating computer viruses (Stuxnet). As reported by Posta, Eli, said in court, “I was wrong, I came from a bad place. I’m a good boy, and I’m sorry. I’m willing to cooperate.”

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Credits- Daniel Kuhn

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