Justice Division seizes $3.6B in bitcoin in its largest finance bust ever

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Authorities stated they seized stolen bitcoin by getting access to the personal keys of a digital pockets that contained the cryptocurrency.


Angela Lang/CNET

The US Justice Division seized on Tuesday $3.6 billion in bitcoin that it says is linked to the 2016 hack of the Hong Kong cryptocurrency change Bitfinex, which was one of many world’s largest crypto firms. Authorities additionally arrested two individuals in Manhattan, charging them with conspiracy to launder cryptocurrency stolen throughout the hack. The bitcoin complete taken within the hack is at the moment valued at $4.5 billion.

Officers seized over 94,000 bitcoin from Ilya Lichtenstein, 34, and his spouse, Heather Morgan, 31. The DOJ stated that the seized bitcoin are valued at $3.6 billion, making this the largest monetary seizure within the division’s historical past. The seizure exhibits that regulation enforcement can observe cash by means of the blockchain, the DOJ stated.   

“We is not going to permit cryptocurrency to be a protected haven for cash laundering or a zone of lawlessness inside our monetary system,” Kenneth Well mannered Jr., assistant lawyer common for the DOJ’s felony division, stated in an announcement.

As momentous because the bust is, Morgan has garnered an enormous quantity of curiosity due to her odd on-line previous. On her LinkedIn profile, she describes herself as an economist, entrepreneur and irreverent rapper. That is led to viral sharing of articles she’s written for the likes of Forbes, together with one titled: “Consultants share tricks to shield your online business from cybercriminals.” That article contains feedback from BitGo, which offered safety assist for Bitfinex on the time of the 2016 hack.

Then there are the rap movies, carried out below the alias Razzlekhan, whereby she variously calls herself the “Turkish Martha Stewart” and “The Crocodile of Wall Road.” Her music Versace Bedouin begins: “This music is for the entrepreneurs and hackers, all of the misfits and good slackers.” The movies have been taken down on YouTube, however stay shared on Twitter.

The Justice Division’s skill to trace the allegedly laundered bitcoin is important. Cryptocurrencies like bitcoin and ether are exchanged on decentralized blockchains, which permit individuals to ship and obtain the tokens with anonymity. That anonymity has attracted criminals, with bitcoin and the like typically getting used as black market forex. 

Cryptocurrency use in crime totaled about $14 billion in transfers to illicit addresses final yr, in response to a January report from Chainalysis. Nonetheless, crime accounted for lower than 1% of cryptocurrency transactions final yr.   

The DOJ stated, citing courtroom paperwork, that the Bitfinex hacker despatched 119,754 bitcoin to Lichtenstein’s digital pockets by means of a collection of two,000 transactions. Round 25,000 bitcoin — right now value about $1 billion — have been transferred out of his pockets. Lichtenstein allegedly tried to disguise these stolen tokens, however the DOJ stated it was in a position to observe his transactions on the blockchain. The division alleges that some bitcoin have been used to purchase gold and NFTs, whereas others have been translated into funds that appeared in Lichtenstein and Morgan’s financial institution accounts. 

The remaining 94,000 bitcoin are what was seized Tuesday. If convicted, each Lichtenstein and Morgan might resist 20 years in jail for conspiracy to commit cash laundering, plus 5 years for conspiracy to defraud america. 



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