The Justice Department said Tuesday it seized more than $3.6 billion worth of Bitcoin that was stolen during a cryptocurrency exchange hack in 2016.
Bitcoin’s value at the time it was recovered represents the largest crypto seizure ever made by the Department of Justice, according to a release. The Bitcoin that was stolen during the 2016 hack of Bitfinex, a virtual currency exchange, was valued at approximately $4.5 billion.
Two suspects were arrested without incident in Manhattan for allegedly trying to launder the proceeds, according to the Justice Department. Ilya Lichtenstein, 34, and his wife, Heather Morgan, 31, both of New York, are scheduled to make their first appearances in federal court Tuesday afternoon in Manhattan, the Justice Department said.
The couple allegedly conspired to launder 119,754 Bitcoin stolen after a hacker breached Bitfinex’s systems and launched more than 2,000 unauthorized transactions. The transactions were placed in a digital wallet that was controlled by Lichtenstein, federal prosecutors said.
Approximately 25,000 of the stolen Bitcoin in the last five years were transferred out of Lichtenstein’s wallet via a lengthy and complicated 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, which make up more than 94,000 Bitcoin, remained in the wallet used to receive and store the illegal proceeds from the hack.
“We’re pleased that DOJ has recovered a significant portion of the bitcoin stolen during the 2016 hack,” Bitfinex said. “We have been cooperating extensively with DOJ since its investigation of this incident began.”
Hacks of digital-asset exchanges and other trading platforms aren’t uncommon. According to Chainalysis, a record $14 billion in crypto was stolen in 2021, mainly through DeFi or decentralized-finance trading platforms.
But major exchanges also have been hacked, including the infamous Mt. Gox in 2014, which lost more than 850,000 Bitcoins, worth $450 million at the time. About 200,000 Bitcoins eventually were recovered.
Yet law enforcement has been notching some victories in tracking down stolen crypto. The DOJ seized 63.7 Bitcoins, worth $2.3 million, last June in ransom that had been paid to hackers by the Colonial Pipeline.
The DOJ’s apparent success in recovering the Bitfinex crypto may be a vote of confidence in digital assets for institutional investors, said Stephane Ouellette, CEO of FRNT Financial, a crypto derivatives firm in Toronto.
“This will change the counterparty risk assessments that many will have of the ecosystem,” he told Barron’s. “The Bitfinex hack took place in a far more nascent time and to see so much of it recovered will be a revelation for many.”
He added that crypto exchanges are now larger, more sophisticated, and well-capitalized to withstand hacks. And “even if there is a hack, the possibility of recovery is very real,” he said.
Justice Department Seizes $3.6 Billion of Bitcoin Stolen in Crypto Hack | Barron's (barrons.com)
Bitcoin’s value at the time it was recovered represents the largest crypto seizure ever made by the Department of Justice, according to a release. The Bitcoin that was stolen during the 2016 hack of Bitfinex, a virtual currency exchange, was valued at approximately $4.5 billion.
Two suspects were arrested without incident in Manhattan for allegedly trying to launder the proceeds, according to the Justice Department. Ilya Lichtenstein, 34, and his wife, Heather Morgan, 31, both of New York, are scheduled to make their first appearances in federal court Tuesday afternoon in Manhattan, the Justice Department said.
The couple allegedly conspired to launder 119,754 Bitcoin stolen after a hacker breached Bitfinex’s systems and launched more than 2,000 unauthorized transactions. The transactions were placed in a digital wallet that was controlled by Lichtenstein, federal prosecutors said.
Approximately 25,000 of the stolen Bitcoin in the last five years were transferred out of Lichtenstein’s wallet via a lengthy and complicated 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, which make up more than 94,000 Bitcoin, remained in the wallet used to receive and store the illegal proceeds from the hack.
“We’re pleased that DOJ has recovered a significant portion of the bitcoin stolen during the 2016 hack,” Bitfinex said. “We have been cooperating extensively with DOJ since its investigation of this incident began.”
Hacks of digital-asset exchanges and other trading platforms aren’t uncommon. According to Chainalysis, a record $14 billion in crypto was stolen in 2021, mainly through DeFi or decentralized-finance trading platforms.
But major exchanges also have been hacked, including the infamous Mt. Gox in 2014, which lost more than 850,000 Bitcoins, worth $450 million at the time. About 200,000 Bitcoins eventually were recovered.
Yet law enforcement has been notching some victories in tracking down stolen crypto. The DOJ seized 63.7 Bitcoins, worth $2.3 million, last June in ransom that had been paid to hackers by the Colonial Pipeline.
The DOJ’s apparent success in recovering the Bitfinex crypto may be a vote of confidence in digital assets for institutional investors, said Stephane Ouellette, CEO of FRNT Financial, a crypto derivatives firm in Toronto.
“This will change the counterparty risk assessments that many will have of the ecosystem,” he told Barron’s. “The Bitfinex hack took place in a far more nascent time and to see so much of it recovered will be a revelation for many.”
He added that crypto exchanges are now larger, more sophisticated, and well-capitalized to withstand hacks. And “even if there is a hack, the possibility of recovery is very real,” he said.
Justice Department Seizes $3.6 Billion of Bitcoin Stolen in Crypto Hack | Barron's (barrons.com)
You can tell she wears the fucking pants based off those eyebrows and that turtleneck.
