The United States authorities announced the seizure by $3.6 billion of cryptocurrency after hackers stole 119.756 Bitcoins (BTC), from Bitfinex. This was more than five years ago.
The U.S. Department of Justice announced Tuesday that it had issued an order for Ilya Lichtenstein’s arrest and Heather Morgan’s detention. They were accused of conspiring to distribute crypto in connection to the Bitfinex hack of 2016. The value of the 119,756 Bitcoins (BTC), which was worth $72 million when hackers broke into security at Bitfinex in August 2016, is now more than $5.1 Billion.
Individuals connected to the 2016 hack have moved small amounts of BTC periodically in separate transactions. This has left the bulk of the funds untraced. According to the DoJ, it was able to trace 25,000 BTC of these funds to financial accounts owned by Morgan and Lichtenstein. After obtaining a search warrant that allowed them to view files containing the private keys to the wallet, special agents were able to access and seize over 94,000 BTC worth $3.6 million from Morgan and Lichtenstein.
“Today’s arrests and the largest ever departmental financial seizure show that cryptocurrency is no safe haven for criminals,” stated Lisa Monaco, Deputy Attorney General. The defendants used cryptocurrency transactions to launder stolen funds in a futile attempt to preserve digital anonymity. The department was able to once again demonstrate its ability and willingness to follow up on the money thanks to its meticulous enforcement.
Kenneth Polite, Assistant Attorney General of the Criminal Division, DoJ, stated that federal authorities could “follow money through blockchain.” He added that Morgan and Lichtenstein used many methods to launder illicit crypto. These included chain hopping, depositing coins at darknet markets and darknet exchanges, withdrawing them, as well as automating transactions with computer programs. The pair also allegedly opened business accounts in the United States to “legitimize” their banking activities.
Both the FBI’s Cyber Crimes Unit and the Internal Revenue Services’ Criminal Investigation Agency, both claimed they worked together to track down the funds stolen in the hack of 2016. Although neither agency provided details about how Morgan or Lichtenstein were first led to them, Paul Abbate, FBI Deputy Director, stated that the agency had the tools to follow the digital trail.
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DoJ’s actions are the largest seizure of cryptocurrency by government authorities. The 2016 Bitfinex hack is one of the most significant thefts in crypto history. The United States has charged Morgan and Lichtenstein with conspiracy to defraud and money laundering. Each could spend up to 25 years behind bars.