Incident Overview
The Bitfinex crypto exchange was hacked for more than 94,000 $BTC. Accident was the second-largest breach of crypto exchange up to that time
A private key from the BitGo multisignature wallet was leaked (Multi-signature wallets: needs 2 of 3 signatures. Bitfinex held two of the keys (including one offline) and BitGo used the third to co-sign transactions.)
BitGo founders mentioned that it was not an issue with their multisig product. So, the most likely scenario was a compromised secret key.
After the attack, Bitfinex managed to track some funds and also issued refunds to its customers in the form of equity. All losses from the attack were equally distributed among the users.
UPDATE
The Justice Department announced it seized more than $3.6 billion in allegedly stolen cryptocurrency linked to the 2016 hack of Bitfinex. As part of the operation, authorities detained a New York couple on allegations they planned to launder the digital goods:
https://www.justice.gov/opa/pr/two-arrested-alleged-conspiracy-launder-45-billion-stolen-cryptocurrency
Officials said they arrested Ilya Lichtenstein, 34, and his wife, Heather Morgan, 31. Officials said they were able to seize more than 94,000 $BTC, which were valued at around $3.6 billion at the time of seizure.
Incident Report
Protocol Information
Market Context at Time of Hack
What the Attacker Needed to Succeed
Understanding the prerequisites for this type of attack helps auditors identify protocols that are most at risk and helps developers build better defenses.
What Auditors Should Check
If you're auditing a protocol with similar architecture to Bitfinex, these are the critical security checks that could have prevented this incident (August 2016).
- Verify all logic paths related to Access Control are guarded by proper access controls and input validation - see the Access Control Attacks attack class for patterns
- Review privileged functions (owner, admin, governance) for potential abuse vectors - centralization risks should be documented and bounded with timelocks or multi-sigs
Master these auditing techniques with hands-on labs and real exploit scenarios in the Smart Contract Hacking course.
Free TrialFunds Recovery
Recovered
$65.0M
Net Loss
0
Related Attack Classes
The technique used in this hack maps to these vulnerability classes in our security curriculum:
Sources & References
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01
Source 1 https://archive.is/634Kf
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