New York couple arrested for laundering $4.5 billion worth cryptocurrency in 2016 Bitfinex hack

The US Department of Justice has managed to link the stolen bitcoins to a couple living in Manhattan and has been able to recover $3.6 billion worth of cryptocurrency from their accounts.

Bitcoin and other cryptocurrencies are often regarded as a safe haven for criminal activities like money laundering. Putting an end to such allegations, the US Department of Justice has nabbed a New York couple that allegedly conspired to launder the proceeds of one of the biggest thefts in the history of cryptocurrencies - the Bitfinex bitcoin theft.

For those who cannot recall the infamous incident, know that in 2016, the cryptocurrency exchange Bitfinex was the target of a massive theft that saw a total of 119,754 bitcoin siphoned off the exchange. At the time, the stolen bitcoins amounted to around $72 million in value. The event caused a massive outcry in the cryptocurrency community, raising fingers at the security of cryptocurrencies in general.

After more than 5 years, the US Department of Justice has now managed to arrest a couple in Manhattan that allegedly has an involvement in the heist. In a public release, the DOJ mentions that the law enforcement has seized over $3.6 billion in cryptocurrency linked to that hack, from accounts of the accused. The total value of the initially stolen amount stands at around $4.5 billion at present.

The arrested accused are Ilya Lichtenstein (34) and his wife Heather Morgan (31), both residents of New York. As per documents submitted to the court by the Department of Justice, Lichtenstein and Morgan allegedly wanted to launder the 119,754 bitcoins stolen from Bitfinex by a hacker. At the time, the hacker had transferred the bitcoins in over 2,000 unauthorized transactions to a digital wallet. It now appears that the digital wallet was under Lichtenstein’s control.

The documents mention that about 25,000 of the stolen bitcoins were transferred out of Lichtenstein’s wallet through "a complicated money laundering process." Post the transfers, the stolen funds were found to be in financial accounts controlled by Lichtenstein and Morgan. The rest 94,000 plus stolen bitcoins were found lying in the wallet used to receive and store the proceeds from the hack.

A legal search into the online accounts controlled by Lichtenstein and Morgan turned up a file that contained the private keys to this digital wallet. The agents then proceeded to seize and recover more than 94,000 bitcoin that had been stolen from Bitfinex. The DOJ mentions that the recovered bitcoins were valued at over $3.6 billion at the time of seizure.

The arrest is a clear indication that stealing cryptocurrencies or using them for illegal activities in the hopes of not being traced is completely futile. As Deputy Attorney General Lisa O. Monaco put it, “Today’s arrests, and the department’s largest financial seizure ever, show that cryptocurrency is not a safe haven for criminals.”