US Government Seizes $3.6 Billion in Bitcoin Tied to 2016 Hack of Crypto Exchange Bitfinex
upstart writes:
US government seizes $3.6 billion in bitcoin tied to 2016 hack of crypto exchange Bitfinex:
Two individuals, Ilya Lichtenstein and Heather Morgan, were arrested in New York and are expected to appear in court Tuesday afternoon. The two are charged with conspiracy to commit money laundering and conspiracy to defraud the United States. They face as many as 25 years in prison if convicted.
The DOJ detailed the seizure operation in a press release, explaining:
"According to court documents, Lichtenstein and Morgan allegedly conspired to launder the proceeds of 119,754 bitcoin that were stolen from Bitfinex's platform after a hacker breached Bitfinex's systems and initiated more than 2,000 unauthorized transactions. Those unauthorized transactions sent the stolen bitcoin to a digital wallet under Lichtenstein's control. Over the last five years, approximately 25,000 of those stolen bitcoin were transferred out of Lichtenstein's wallet via a complicated money laundering process that ended with some of the stolen funds being deposited into financial accounts controlled by Lichtenstein and Morgan. The remainder of the stolen funds, comprising more than 94,000 bitcoin, remained in the wallet used to receive and store the illegal proceeds from the hack."
"After the execution of court-authorized search warrants of online accounts controlled by Lichtenstein and Morgan, special agents obtained access to files within an online account controlled by Lichtenstein. Those files contained the private keys required to access the digital wallet that directly received the funds stolen from Bitfinex, and allowed special agents to lawfully seize and recover more than 94,000 bitcoin that had been stolen from Bitfinex. The recovered bitcoin was valued at over $3.6 billion at the time of seizure."
Notably, the amount seized corresponds to a series of transactions of Bitfinex hack-tied BTC on February 1. According to a statement of facts issued by the Department of Justice, investigators gained access to the wallets on January 31, meaning the February 1 transactions took place one day later.
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