New York-based couple arrested for laundering over $5bn worth of Bitcoin

February 10, 2022

By Anjali Kochhar

A couple, who has been accused of laundering cryptocurrency worth over $5 billion that was stolen during the 2016 hack of Bitfinex, a virtual currency exchange, was arrested in Manhattan Tuesday morning.

The U.S Department of Justice seized $3.6 billion in stolen Bitcoin in what’s considered the department’s largest financial cryptocurrency bust to date.

Here’s what you need to know:

  • In a statement released Tuesday, the DoJ revealed Ilya Lichtenstein, 34, and his wife, Heather Morgan, 31, of New York City, were arrested Tuesday morning.
  • Citing court documents, the DoJ noted that Lichtenstein and Morgan allegedly conspired to launder the proceeds of 119,754 Bitcoins (over $5 billion) that were stolen from Bitfinex’s platform after a hacker breached Bitfinex’s systems and initiated over 2,000 unauthorized transactions.
  • The department further noted that about 25,000 Bitcoins were then transferred out of that wallet through a “complicated laundering process and into accounts controlled by both Lichtenstein and Morgan.” The Bitcoin balance in Lichtenstein’s wallet was used to store the illegal funds, according to the criminal complaint.
  • The couple reportedly used their Bitcoins to purchase gold and gift cards for personal expenses.
  • “Today’s arrests, and the department’s largest financial seizure ever, show that cryptocurrency is not a safe haven for criminals,” said Deputy Attorney General Lisa O. Monaco.
  • Bitfinex, the cryptocurrency trading platform, said that the company will cooperate with the Justice Department by following an appropriate legal process to establish their rights to a return of the stolen Bitcoin.
  • “Bitfinex intends to provide further updates on its efforts to obtain a return of the stolen bitcoin as and when those updates are available,” Bitfinex said in a Tuesday statement.
  • Bitcoin was trading at 33,00,396 INR as of 6.26 p.m. Wednesday, as per CoinMarketCap data. Money laundering cases in the cryptocurrency space have been increasing day by day.
  • A recent report by blockchain data platform Chainalysis has revealed that cybercriminals laundered about $8.6 billion in cryptocurrency in 2021, a 30% rise from the previous year.
  • “Financial crime strikes at the core of our national and economic security. With a hack of this magnitude, public and private sector collaboration is crucial to ensure continued consumer confidence in our financial system,” said Acting Executive Associate Director Steve Francis of Homeland Security Investigations (HSI) in the statement.
  • On the increasing rate of cryptocurrency-related crimes, Shivam Thakral, CEO of Indian exchange BuyUcoin said, “Crypto is new and evolving on a daily basis which calls for a global alliance dedicated to creating a regulatory framework for the crypto industry. I think countries should understand the pace at which crypto is entering the financial system and should put checks and balances in place accordingly.”

About the author

Anjali Kochhar covers cryptocurrency stories in India as well as globally. Having been in the field of media and journalism for over three years now, she has developed a sharp news sense and works hard to present information that goes beyond the obvious. She is an avid reader and loves writing on a wide range of subjects.

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