Seized $3.6 Billion in Stolen Bitcoins

 Seized $3.6 Billion in Stolen Bitcoins

The US Department of Justice seized more than 94,000 Bitcoins from the Bitfinex hack and asserted that the digital currency is not a safe haven for criminals.

On February 8, the US Department of Justice announced that it had arrested two people on charges of conspiracy to launder money and collect all the remaining Bitcoin before it was dispersed. The agency did not disclose when it found the said Bitcoins, but said they were worth $3.6 billion at the time. Currently, this amount of coins is equivalent to more than 4.5 billion USD and is the largest financial seizure to date that the US Department of Justice has ever conducted. The two arrested are Ilya Lichtenstein, 34, and his wife Heather Morgan, 31, living in New York.

According to investigative agency documents, the 2016 hack caused 119,754 Bitcoins to be stolen from the Bitfinex exchange. The hacker then made more than 2,000 unauthorized transactions, transferring the Bitcoins to a digital wallet controlled by Lichtenstein. “Over the course of five years, approximately 25,000 Bitcoins were moved out of Lichtenstein's wallets through a complex money-laundering process that ended with funds being deposited into accounts controlled by Lichtenstein and Morgan. The remainder of more than 94,000 Bitcoins still remains. in the wallet," the notice read.

After gaining permission to search Lichtenstein's online accounts, the agents found a file containing the secret key to access the aforementioned wallet, thereby recovering the remaining coins.

The money laundering technique that the Lichtenstein couple used was assessed by the US Department of Justice as relatively sophisticated and well planned. This process includes using fake identities to set up online accounts, using automated programs to execute batches of transactions in a short time, transferring stolen funds to accounts on cryptocurrency exchanges and black market to erase transaction history as well as traces of money flow. In addition, they also convert Bitcoin to some form of virtual currency with high anonymity, and use business accounts to legitimize operations at the bank.

"Crime always leaves a trail, and the FBI has tools to track digital traces, wherever they lead," said FBI Deputy Director Paul M. Abbate.

US Assistant Attorney General Kenneth A. Polite also affirmed that this result shows that investigators can track money on the blockchain and asserted that cryptocurrencies will not be a safe haven for criminals to launder money. .

Cryptocurrency is a money laundering channel used by criminals in recent years. Photo: Luu Quy

Cryptocurrency is a money laundering channel used by criminals in recent years. Photo: Luu Quy

With its anonymous nature, cryptocurrencies are considered as one of the methods of money laundering by criminals. With coins like Bitcoin, transactions are recorded on the blockchain and anyone can track them.

According to CoinDesk, on February 1, followers of wallet addresses related to the Bitfinex hack saw more than 94.6 thousand Bitcoins transferred from this wallet. Most likely, this is also the time when the above amount of digital money was seized. The last time this wallet worked was in April 2021 when about 700 million USD worth of Bitcoin was transferred to CoinBase exchange, some others were transferred to darknet markets like Hydra and Wasabi wallet for money laundering.