The recent positive performance of the LEO token hints at a potential resolution to the long-standing legal issues surrounding the hack of the Bitfinex exchange. Vetle Lunde, the lead analyst at K33 Research, noted that this uptick may lead to the United States potentially losing approximately 30% of its bitcoin reserve volume.
At the center of this situation is the 94,643 BTC that were seized from hacker Ilya Lichtenstein’s wallet. Lichtenstein was sentenced in November 2024 to five years in prison for his role in laundering funds stolen from the exchange, while his wife, Heather Morgan, received an 18-month prison sentence for her assistance in these illegal activities. Both individuals admitted guilt and agreed to forfeit the stolen assets.
In January 2025, prosecutors petitioned the court to return nearly 80% of the total 119,754 BTC to Bitfinex. Lunde remarked that Bitfinex has plans to use a significant portion of the returned funds—specifically 80%—to buy back and burn LEO tokens over an 18-month period.
The analyst outlined two key drivers behind the valuation of the LEO token: ongoing buybacks financed by Bitfinex’s trading revenues and the expected future burning of tokens. Based on Lunde’s analysis, the fair valuation of the exchange’s token should hover around $5 billion, assuming bitcoin is priced at $65,000, yet it currently sits at approximately $8 billion—60% higher than the calculated fair value.
As for the implications on bitcoin reserves, Lunde noted that the seized 94,643 BTC constitutes around 30% of the U.S. Strategic Bitcoin Reserve, which totals 328,372 BTC. The legal framework governing U.S. crypto reserves requires that identifiable victims be allowed to reclaim their assets, placing Bitfinex’s coins within this category, especially after the exchange was formally recognized as the sole victim of the hack in October 2024.
Lunde elaborated that under U.S. asset forfeiture law, third parties do have the right to assert ownership claims before the distribution of assets takes place. This has resulted in further legal dispute, as former Bitfinex users and the exchange itself contest the ownership of the coins in question. Some claimants argue they are direct victims entitled to receive their share of the bitcoins, while Bitfinex contends that these claims largely pertain to balance adjustments made post-hack rather than direct ownership of the stolen currency.
While awaiting legal clarification on the rightful ownership of the assets, the BTC remains frozen. In a notable development, Lichtenstein released a message from prison, asserting that he acted independently in executing the Bitfinex hack.
