DOJ seizes $3.6 billion from 2016 Bitfinex hack, arrests New York couple
The US Department of Justice announced today that it seized more than 94,000 Bitcoin assets stolen from the Bitfinex cryptocurrency exchange in 2016 and arrested a New York couple on charges connected to attempts to launder the funds.
The couple, Ilya Lichtenstein, 34, and his wife, Heather Morgan, 31, both from New York City, are scheduled to be arraigned in a New York court later today to face official charges.
DOJ Deputy Attorney General Lisa O. Monaco, who announced the arrests today in a press release, said the 94,000 Bitcoin seized from the two suspects, valued at roughly $3.6 billion, represent the “department’s largest financial seizure ever.”
According to court documents [PDF] unsealed today, officials claim that Lichtenstein played a pivotal role in laundering the 119,754 Bitcoin stolen from Bitfinex in August 2016, funds that were sent to cryptocurrency addresses under the suspect’s name through more than 2,000 transactions.
Over the past five years, officials said that roughly 25,000 of the stolen funds were laundered through a “complicated money laundering process.”
This included using fictitious identities to set up online accounts; utilizing computer programs to automate transactions; depositing the stolen funds into accounts at a variety of virtual currency exchanges and darknet markets (AlphaBay) and then withdrawing the funds to obfuscate its trail; converting Bitcoin to other forms of virtual currency; and using US-based business accounts to legitimize their banking activity.
Officials charged Lichtenstein for this activity, but also his wife, in whose names some financial and bank accounts were also created.
The 94,000 Bitcoin figure that authorities seized today are funds that were still present in Lichtenstein’s cryptocurrency accounts that were used to receive the stolen Bitfinex funds.
The DOJ said it was able to seize the funds after an FBI search warrant of one of Lichtenstein’s cloud storage accounts found a file containing cryptocurrency addresses and their corresponding private key that granted access to funds stored within. Authorities said that “almost all” of addresses in this link were “directly linked to the hack.”
The arrest announced today also comes after roughly 12,000 Bitcoin from the Bitfinex hack moved in April 2021, alerting many blockchain trackers and security firms.
Despite suffering one of the largest cryptocurrency heists at the time, Bitfinex managed to reimburse all users and continued to operate.
In June 2019, Israeli authorities detained two brothers, Eli and Assaf Gigi, on their supposed involvement in the 2016 hack.