Federal authorities arrested a couple early Tuesday for allegedly conspiring to launder roughly $4.5 billion in cryptocurrency stolen during the 2016 hack of a digital asset exchange, the Department of Justice (DOJ) announced.
Ilya Lichtenstein and Heather Morgan allegedly concocted an elaborate money-laundering scheme using multiple fake identities and bitcoin addresses to hide the stolen money, according to court documents filed by Internal Revenue Service (IRS) agent Christopher Janczewski, who investigated the case. The funds were from a 2016 hack of virtual currency exchange Bitfinex, based in Hong Kong.
Authorities have seized over $3.6 billion in bitcoin linked to the hack, according to the DOJ. (RELATED: Cyber Criminals Steal Millions After Hacking Popular Crypto Exchange)
“Today’s arrests, and the department’s largest financial seizure ever, show that cryptocurrency is not a safe haven for criminals,” Deputy Attorney General Lisa O. Monaco said in a statement. “In a futile effort to maintain digital anonymity, the defendants laundered stolen funds through a labyrinth of cryptocurrency transactions. Thanks to the meticulous work of law enforcement, the department once again showed how it can and will follow the money, no matter what form it takes.”
We’re pleased that DOJ has announced recovery of a significant portion of the bitcoin stolen during the 2016 hack. https://t.co/voGmFUkYoY
— Bitfinex (@bitfinex) February 8, 2022
Lichtenstein and Morgan face up to 20 years in prison if convicted on charges of conspiracy to commit money laundering and conspiracy to defraud the U.S., according to the DOJ.
IRS agents were able to track Lichtenstein and Morgan by tracing cryptocurrency transactions between wallets known to be controlled by the couple, according to court documents.
“In a methodical and calculated scheme, the defendants allegedly laundered and disguised their vast fortune,” Jim Lee, chief of IRS-Criminal Investigation (IRS-CI), said in a statement. “IRS-CI Cyber Crimes Unit special agents have once again unraveled a sophisticated laundering technique, enabling them to trace, access and seize the stolen funds, which has amounted to the largest cryptocurrency seizure to date, valued at more than $3.6 billion.”
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