US regulator seizes 4.8 billion in Bitcoin stolen in Bitfinex hack | The Straits Times

Washington (Bloomberg) – The United States seized approximately $3.6 billion ($4.84 billion) in stolen bitcoin during a 2016 hack of the exchange Bitfinex, the largest financial seizure in history, and arrested Two people, the US Department of Justice (DOJ) said.

ilya lichtenstein and his wife, heather morgan, were arrested in the morning and appeared in federal court in manhattan by late afternoon. The two, who appear to have had colorful social media accounts prior to their arrests, allegedly conspired to launder 119,754 stolen bitcoins after a hacker breached bitfinex’s systems.

Reading: 4.8 billion bitcoin

“Today’s arrests, and the department’s largest ever financial seizure, show that cryptocurrencies are not a safe haven for criminals,” Deputy Attorney General Lisa Monaco said in a statement. “In a futile effort to maintain digital anonymity, the defendants laundered the stolen funds through a maze of cryptocurrency transactions.”

bitfinex is the exchange affiliated with tether, the world’s largest stablecoin. At the time of the hack, the digital currency loot was estimated to be about $71 million, the doj said. the department said the total value of stolen bitcoin is now worth around 4.5 billion US dollars.

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“this case and today’s arrests are extraordinary,” said mr. ari redbord, a former federal prosecutor who is now the head of legal and government affairs at trm labs, a blockchain intelligence firm. “This is further proof that the nature of the blockchain, the forever open ledger, allows investigators to follow money in ways impossible in complex networks of shell companies and bulk cash smuggling.”

The cryptocurrency known as unus sed leo, which was issued in part to recapitalize the bitfinex exchange after the 2016 attack, surged more than 50 percent after the doj’s announcement.

Dressed casually, Lichtenstein and Morgan did not speak at their court appearance Tuesday afternoon. their attorneys, who have retained independent counsel, spoke the entire time.

The government asked the judge not to allow them to be released on bail. each of them faces the possibility of a 20-year prison sentence, so they have the motivation to run, a prosecutor told the judge.

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the trial will finally take place in washington, where the charges were filed. the defendants in Tuesday’s case were not accused of doing the actual hacking. A 20-page factual statement details the complex movement of bitcoin after the attack, but offers no clues as to who actually stole the digital currency. Justice department officials declined to comment when asked who carried out the hack.

according to the doj, the couple used sophisticated techniques, including “using fictitious identities to set up online accounts; using computer programs to automate transactions, a laundering technique that allows many transactions to take place in a short period of time ; deposit the stolen funds into accounts at a variety of virtual exchanges and darknet markets and then withdraw the funds.”

lichtenstein, 34, and morgan, 31, also funneled the money through the alphabay marketplace, which was closed in 2017, to hide their transactions. some of the money was collected through bitcoin ATMs. some were used to purchase non-fungible tokens (nfts) and gold. they even used the money to buy a walmart gift card.

Lichtenstein, nicknamed Dutch, described himself as an angel investor in technology companies, as well as an advisor to multiple startups, according to a public LinkedIn profile. A twitter account under his name also posted frequently, weighing in on topics such as cryptocurrency trends, the tech sector, and the evolution of nfts.

morgan, who prosecutors say used the alias razzlekhan, promoted herself as a part-time rapper, businesswoman and media personality on what appears to be her personal website. In one post, the defendant described herself as “wall street’s infamous crocodile” and “like Genghis Khan, but with more pizzazz.”

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