Monday, 28th November 2022
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American couple arrested for planing to launder $4.5 billion stolen bitcoin

An American couple has been arrested for an alleged conspiracy to launder cryptocurrency that was stolen during the 2016 hack of Bitfinex, a virtual currency exchange, presently valued at approximately $4.5 billion. United States Department of Justice (DoJ) in a statement said law enforcement has seized over $3.6 billion in cryptocurrency linked to that hack…

An American couple has been arrested for an alleged conspiracy to launder cryptocurrency that was stolen during the 2016 hack of Bitfinex, a virtual currency exchange, presently valued at approximately $4.5 billion.

United States Department of Justice (DoJ) in a statement said law enforcement has seized over $3.6 billion in cryptocurrency linked to that hack by Ilya Lichtenstein, 34, and his wife, Heather Morgan, 31, both of New York, New York.

Lichtenstein and Morgan are charged with conspiracy to commit money laundering, which carries a maximum sentence of 20 years in prison, and conspiracy to defraud the United States, which carries a maximum sentence of five years in prison.

A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.

Court documents said 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 bitcoins 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.

DoJ explained that 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, DoJ said.

U.S. Attorney Matthew M. Graves for the District of Columbia said the DoJ “and our office stand ready to confront these threats by using 21st century investigative techniques to recover the stolen funds and to hold the perpetrators accountable.”

Chief Jim Lee of IRS-Criminal Investigation (IRS-CI) said “the defendants allegedly laundered and disguised their vast fortune” but the “IRS-CI Cyber Crimes Unit special agents have once again unraveled a sophisticated laundering technique, enabling them to trace, access and seize the stolen funds, which has amounted to the largest cryptocurrency seizure to date, valued at more than $3.6 billion.”

Assistant Attorney General Kenneth A. Polite Jr. of the Justice Department’s Criminal Division said the “arrests today show that we will take a firm stand against those who allegedly try to use virtual currencies for criminal purposes.”