The US Department of Justice (DOJ) has seized and recovered over 94,000 Bitcoins worth $3.6 billion, stolen from crypto exchange Bitfinex by a US-based entrepreneur couple in 2016.
According to the DOJ, Ilya Lichtenstein, 34, and his wife, Heather Morgan, 31, both of New York were arrested in Manhattan 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.
The couple faces charges of conspiring to launder money and to defraud the US government, facing up to 25 years in prison if convicted.
According to DOJ, The couple, both of New York, were scheduled to make their initial appearances in federal court Monday at 3:00 p.m. in Manhattan.
“Two individuals were arrested this morning in Manhattan 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. Thus far, law enforcement has seized over $3.6 billion in cryptocurrency linked to that hack,” the DOJ said in a statement.
“Today’s arrests, and the department’s largest financial seizure ever, show that cryptocurrency is not a safe haven for criminals,” said Lisa O. Monaco, Deputy Attorney General.
“In a futile effort to maintain digital anonymity, the defendants laundered stolen funds through a labyrinth of cryptocurrency transactions, Monaco added in a statement.
According to court documents, 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 bitcoin 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.
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, said the DoJ.
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.
“Cryptocurrency and the virtual currency exchanges trading in it comprise an expanding part of the U.S. financial system, but digital currency heists executed through complex money laundering schemes could undermine confidence in cryptocurrency,” said U.S. Attorney Matthew M. Graves for the District of Columbia.
The couple has been charged with conspiracy to commit money laundering, which carries a maximum sentence of 20 years in prison, and conspiracy to defraud the US, which carries a maximum sentence of five years in prison, the DOJ said.
A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.
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