The US Department of Justice (DoJ) has confirmed seizing $3.6 billion worth of Bitcoin in what could be termed as DoJ’s largest ever finance bust. The money was taken from a New York-based couple, charged for their involvement in money laundering of funds stolen in the Bitfinex cryptocurrency hack in 2016.
A Milestone Hack
Back in 2016, as reported by Hackread.com, a milestone cryptocurrency hack occurred in which one of the biggest crypto firms in the world, the Hong Kong-based Bitfinex exchange, was targeted, and 119,000 bitcoins were stolen. About six years later, the DoJ has arrested a couple that allegedly perpetrated this hack and laundered the stolen cryptocurrency.
Details of Seizure
In a landmark move, the US DoJ seized around 94,000 bitcoins from the couple, worth $71 million when it was stolen. The recovered bitcoin currently is worth over $3.6 billion as today, one bitcoin is worth around $43,400.
Deputy Attorney General Lisa O. Monaco has regarded the seizure as the department’s largest financial seizure and claims that this indicates that the crypto sector doesn’t offer a safe haven for cybercriminals.
In a futile effort to maintain digital anonymity, the defendants laundered stolen funds through a labyrinth of cryptocurrency transactions.
Lisa O Monaco – D-AG
Couple charged for 2016’s Bitfinex hack
According to court documents, the 34-year-old Ilya Lichtenstein and his wife, 31-year-old Heather Morgan, are involved in the 2016 cryptocurrency hack on Bitfinex, and the couple was arrested on Tuesday. Ilya Lichtenstein operated under the moniker Dutch.
Reportedly, he is a dual national, a Russian-US citizen, and a resident of New York. The couple stole a total of 119,754 bitcoin, which are currently worth $4.5 billion, from Bitfinex.
According to the details shared by DoJ, a hacker breached Bitfinex’s systems and initiated over two thousand unauthorized transactions, and 25,000 bitcoins were transferred out of Ilya’s wallet via a series of laundering transactions over 5 years. Some of these funds were sent to the financial accounts of the couple.
Prosecutors allege that the couple utilized sophisticated money laundering methods to transfer stolen funds without raising suspicion. For instance, they used fake identities to create fake accounts. They used different programs to automate transactions to transfer the amount within a brief period quickly.
Moreover, they deposited stolen funds into numerous cryptocurrency exchanges and Dark Web marketplaces to hide transaction history by breaking up funds’ flow.
The criminal complaint further revealed that the couple performed “chain hopping” to convert bitcoins into other virtual currencies, including AEC (anonymity-enhanced virtual currency), and used business accounts in the US to make banking activity look legit. The couple faces 25 years in prison for laundering money and fraud.
In a conversation with Hackread.com, Tom Kellermann, Head of Cybersecurity Strategy, VMware said that “When it comes to combating cybercrime cartels, it’s going to take an offensive mindset.
Kellermann advised that the seized funds should be utilized for protection from future cyber attacks. “The next priority should be to redeploy these funds to critical infrastructure protection from future cyberattacks. It’s not a matter of if, but when these attacks will occur, and we must put better cybersecurity structures into place,” added Kellermann.