U.S. Justice Department said on Tuesday it has unravelled its biggest-ever cryptocurrency theft, seizing a record-shattering $3.6 billion in bitcoin tied to the 2016 hack of digital currency exchange Bitfinex and arresting a husband-and-wife team on money laundering charges.
Ilya Lichtenstein, 34, and his wife, Heather Morgan, 31, both of New York, New York, are scheduled to make their initial appearances in federal court today at 3:00 p.m. in Manhattan.
The couple had active public profiles, with Morgan known as rap singer “Razzlekhan,” a pseudonym that she said on her website referred to Genghis Khan “but with more pizzazz.”
“Today’s arrests, and the department’s largest financial seizure ever, show that cryptocurrency is not a haven for criminals,” said Deputy Attorney General Lisa O. Monaco. “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.”
“Today, federal law enforcement demonstrates once again that we can follow the money through the blockchain, and that we will not allow cryptocurrency to be a haven for money laundering or a zone of lawlessness within our financial system,” said Assistant Attorney General Kenneth A. Polite Jr. of the Justice Department’s Criminal Division. “The arrests today show that we will take a firm stand against those who allegedly try to use virtual currencies for criminal purposes.”
“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 Department of Justice and our office stand ready to confront these threats by using 21st-century investigative techniques to recover the stolen funds and to hold the perpetrators accountable.”
The New York City-primarily based couple is being investigated for conspiring to launder the robbed BTC tokens and defraud America through the use of registered enterprise debts to legitimise their illegal banking activities.
If discovered guilty, the duo can get prison time of up to twenty-five years — two decades for the primary rate and 5 for the second.
“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 unauthorised transactions. Those unauthorised transactions sent the stolen Bitcoin to a digital wallet under Lichtenstein’s control,” commenting matter, the DoJ said in an official statement.
This is, as stated by a DOJ spokesperson the “largest cryptocurrency seizure to date”. 94,636 Bitcoin were confiscated on Tuesday by the US Department of Justice (DOJ). These are the Bitcoin stolen in one of the biggest hacks in cryptocurrency history, the one at the Bitfinex exchange in 2016.
Meanwhile, Bitfinex’s token, Unus Sed LEO, is up 48% way to the superb information on the restoration of the stolen funds. In doing so, the token has reached its all-time excessive. The cause for this report excessive is likewise to be observed withinside the reality that 80% of the recovered funds, as a way to be back to Bitfinex inside 18 months, can be utilized by the group to shop for LEO withinside the marketplace and as a result, the token should maintain to rise. These LEO tokens had been created withinside the very aftermath of the 2016 hacker assault to reimburse folks who misplaced their funds.