Bitfinex ‘Hacker’ Proposes Giveaway of Stolen Bitcoins

bitcoin bitfinex BFX hack giveaway
This illustration shows a bitcoin sign in Hong Kong on August 3. A major Hong Kong-based Bitcoin exchange has suspended trading after $65 million in the virtual unit was reportedly stolen by hackers—sending the digital currency plunging more than 20 percent. ANTHONY WALLACE/AFP/Getty Images

An online giveaway of 1,000 bitcoins (worth $580,000) has prompted speculation that it is part of an elaborate money laundering scheme by hackers who stole $70m worth of the cryptocurrency from an exchange.

On Tuesday, August 2, the popular cryptocurrency exchange Bitfinex (BFX) revealed that it had suffered a major hack, resulting in the loss of 119,756 bitcoins. On Wednesday, an anonymous Reddit user announced the giveaway under the moniker rekcahxfb—a reversal of BFX hacker.

“Post your [bitcoin] address below,” the post read. “One lucky winner will receive 1000 BTC [bitcoins] after one week from now.”

Some Reddit users were quick to point out how such a giveaway could work as a guise for money laundering, encouraging other users not to get involved.

“He’s going to send the money to an account he controls so that identity can trade uninhibited, claiming it only received stolen funds instead of actually stealing them,” one user speculated.

Another user stated: It provides an additional ‘plausible deniability’ to any prosecution. Receiving stolen funds is a lesser crime than hacking, and theft of tens of millions of dollars.”

Following the news of the hack of BFX, the price of bitcoin fell by around 20 percent amid fears from investors about more hacks.

It is not yet clear how the hack took place or who was behind it and hacks to other exchanges, such as MtGox in 2013, have still not resulted in the lost funds being recovered.

All trading has been suspended on Bitfinex, as well as all withdrawals from the exchange, while an investigation is carried out.

“The theft is being reported to—and we are co-operating with—law enforcement,” BFX said in a blog post following the theft. “We are deeply concerned about this issue and we are committing every resource to try to resolve it.”