The U.S. Justice Department (DoJ) on Tuesday announced the arrest of a married couple in connection with conspiring to launder cryptocurrency worth $4.5 billion that was siphoned during the hack of the virtual currency exchange Bitfinex in 2016.
Ilya Lichtenstein, 34, and his wife, Heather Morgan, 31, both of New York, are alleged to have “stolen funds through a labyrinth of cryptocurrency transactions,” with the law enforcement getting hold of over $3.6 billion in cryptocurrency by following the money trails, resulting in the “largest financial seizure ever.”
Prosecutors charged the couple not for the hack itself, but rather for receiving the stolen bitcoin into a digital wallet under their ownership, a part of which was laundered to conceal the activities and the movement of the money. In 2019, Israeli authorities apprehended two brothers, Eli and Assaf Gigi, over their supposed involvement in the 2016 security breach.
“Bitfinex will work with the DoJ and follow appropriate legal processes to establish our rights to a return of the stolen bitcoin,” the company said in a statement, adding “We have been cooperating extensively with the DoJ since its investigation began and will continue to do so.”
The laundering scheme involved moving proceeds of 119,754 bitcoin (BTC) from Bitfinex by initiating more than 2,000 unauthorized transactions that were diverted to a digital wallet under Lichtenstein’s control. Over the past five years, roughly 25,000 stolen bitcoins were then transferred and deposited into financial accounts held by the couple.
“Beginning in or around January 2017, a portion of the stolen BTC moved out of Wallet 1CGA4s in a series of small, complex transactions across multiple accounts and platforms,” explained IRS investigator Christopher Janczewski in an affidavit. “This shuffling, which created a voluminous number of transactions, appeared to be designed to conceal the path of the stolen BTC, making it difficult for law enforcement to trace the funds.”
images from Hacker News