US seizes 94,636 bitcoins from 2016 Bitfinex hack – 2 arrested
The United States Department of Justice (DOJ) announced the seizure of 94,636 bitcoins directly related to the 2016 Bitfinex exchange hack. This is “DOJ’s largest crypto seizure to date.” In addition, two people were arrested in connection with the cryptocurrency hack and theft.
2 people involved in Bitfinex hack arrested
On Tuesday, the Department of Justice (DOJ) announced that the US government has seized a large amount of stolen cryptocurrency directly related to the 2016 Bitfinex exchange hack.
According to the announcement, this is the DOJ’s largest crypto seizure to date, valued at $3.6 billion at the time of the seizure (over $4 billion at current prices).
Additionally, Ilya Lichtenstein, 34, and his wife, Heather Morgan, 31, have been arrested on charges of conspiring to launder $4.5 billion in cryptocurrency stolen in the Bitfinex hack. Notably, court documents show that they allegedly conspired to launder 119,754 bitcoins stolen from the crypto exchange.
During the 2016 Bitfinex hack, more than 2,000 transactions moved stolen bitcoins to a crypto wallet controlled by Lichtenstein. The DOJ found that about 25,000 BTC had been stolen from his wallet over the past five years through a complex money laundering process, adding that some of the stolen funds were deposited in financial accounts controlled by Lichtenstein and Morgan.
The Justice Department further stated that the remainder of the stolen funds, including approximately 94,636 bitcoins, remained in the wallet.
“Following the execution of a court search warrant against online accounts controlled by Lichtenstein and Morgan, agents were granted access to the files in that online account.”
“These files contain the private keys needed to access the digital wallet that received the stolen funds from Bitfinex and allow agents to legally seize and recover more than 94,000 bitcoins stolen from Bitfinex.”
FBI Deputy Director Paul M. Abbate pointed out:
“This case is a reminder that the FBI has the tools to track digital assets wherever they move.”
“This arrest and the department’s biggest financial meltdown to date demonstrates that cryptocurrencies are not a safe haven for criminals,” commented Assistant Attorney General Lisa O. Monaco.
Lichtenstein and Morgan employed “a variety of sophisticated money laundering techniques,” the complaint said. These techniques include using fake identities to set up online accounts, using computer programs to automate transactions, depositing stolen funds into accounts on cryptocurrency exchanges and various dark web markets, and using an anonymous Augmented Virtual Reality (AEC) system to implement “chain hopping”, a method of seamlessly moving cryptocurrencies between different wallets to avoid tracking.
“Lichtenstein and Morgan were charged with conspiracy to launder money with a maximum sentence of 20 years in prison and conspiracy to commit fraud in the United States with a maximum sentence of 5 years in prison.”
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