Two individuals were arrested this morning in Manhattan for an alleged conspiracy to launder bitcoin (BTC) that was stolen during the 2016 hack of Bitfinex, presently valued at approximately USD 4.5bn, the US Department of Justice said.
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According to them, thus far, law enforcement has seized over USD 3.6bn in BTC linked to that hack.
Per the DoJ, the suspects, Ilya Lichtenstein, 34, and his wife, Heather Morgan, 31, both of New York, are scheduled to make their initial appearances in federal court today at 3:00 PM local time in Manhattan.
They are charged with conspiracy to commit money laundering, which carries a maximum sentence of 20 years in prison, and conspiracy to defraud the United States, which carries a maximum sentence of five years in prison, the DoJ said.
According to the department, this is what happened:
- Lichtenstein and Morgan allegedly conspired to launder the proceeds of BTC 119,754 that were stolen from Bitfinex.
- Over the last five years, approximately BTC 25,000 were transferred out of Lichtenstein’s wallet via a complicated money 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, comprising more than 94,000 bitcoin, remained in the wallet used to receive and store the illegal proceeds from the hack.
- However, special agents obtained access to files within an online account controlled by Lichtenstein and also accessed the private keys required to access BTC 94,000 (valued at USD 3.6bn at the time of seizure) stolen from Bitfinex.
“Today, federal law enforcement demonstrates once again that we can follow money through the blockchain, and that we will not allow cryptocurrency to be a safe haven for money laundering or a zone of lawlessness within our financial system,” Assistant Attorney General Kenneth A. Polite Jr. of the Justice Department’s Criminal Division, was quoted as saying in the announcement.
(This is a developing story and is being constantly updated)