DoJ seizes $3.6B in crypto and arrests two in connection with 2016 Bitfinex hack

Posted by

“The division once extra confirmed how it’ll and must peaceable put together the money,” acknowledged Deputy Attorney Overall Lisa Monaco.

658 Total views

33 Total shares

DoJ seizes $3.6B in crypto and arrests two in connection with 2016 Bitfinex hack

Authorities within the United States have made arrests and launched the seizure of $3.6 billion in cryptocurrency extra than 5 years after hackers stole 119,756 Bitcoin (BTC) from the Bitfinex alternate.

In a Tuesday announcement, the U.S. Department of Justice acknowledged it had ordered the arrest of Ilya Lichtenstein and his major other Heather Morgan for allegedly conspiring to launder crypto connected to the 2016 Bitfinex hack. The 119,756 Bitcoin (BTC) — value $72 million on the time hackers breached safety on the alternate in August 2016 — is now valued at extra than $5.1 billion.

For the rationale that 2016 hack, folks connected to the stolen coins have periodically moved minute amounts of BTC in separate transactions, leaving the bulk of the funds untouched. The DoJ reported that it had traced 25,000 BTC of these transferred funds to financial accounts controlled by Lichtenstein and Morgan. Special agents had been then able to compose entry to and eradicate extra than 94,000 BTC — value $3.6 billion on the time — from Morgan and Lichtenstein after a search warrant allowed them to breeze trying to search out files containing deepest keys to the pockets.

“These days’s arrests, and the division’s largest financial seizure ever, uncover that cryptocurrency just shouldn’t be any longer a honorable haven for criminals,” acknowledged Deputy Attorney Overall Lisa Monaco. “In a futile effort to succor digital anonymity, the defendants laundered stolen funds via a labyrinth of cryptocurrency transactions. Thanks to the meticulous work of law enforcement, the division once extra confirmed how it’ll and must peaceable put together the money, no subject what have it takes.”

Assistant Attorney Overall for the Criminal Division of the DoJ Kenneth Polite added that federal authorities had the ability to “put together money via the blockchain.” The announcement stated that Morgan and Lichtenstein archaic heaps of the suitable solution to launder the illicit crypto, including chain hopping, depositing the coins at exchanges and darknet markets and withdrawing them, and automating transactions the explain of computer programs. To boot, the pair allegedly region up replace accounts within the United States to “legitimize their banking explain.”

Both investigative teams from the FBI and the Cyber Crimes Unit of the Interior Income Companies and products’ prison investigation agency acknowledged they’d worked to tag the funds from the 2016 hack. Though neither agency specified how authorities had been on the muse ended in Morgan and Lichtenstein, FBI Deputy Director Paul Abbate acknowledged the agency had “the tools to put together the digital dash.”

Linked: Notorious crypto figures arrested in 2020

The DoJ’s actions characterize the largest seizure of crypto by govt authorities, with the 2016 Bitfinex hack one among the largest thefts within the history of the crypto situation. Authorities have charged Lichtenstein and Morgan with conspiracy to commit money laundering and conspiracy to defraud the United States. Each would possibly face as much as 25 years in detention middle.