Over $3.6bn (£2.7bn) worth of stolen Bitcoin has been recovered and two people charged in connection with a major crypto hack.
The US Department of Justice today confirmed it had arrested and charged Ilya Lichtenstein, 34, a Russian-US national residing in New York, and his wife Heather Morgan, 31, for conspiring to launder billions of dollars worth of crypto in connection with a 2016 attack targeting crypto exchange Bitfinex. The couple is scheduled to make their initial appearances in federal court later today.
“Criminals always leave tracks, and today’s case is a reminder that the FBI has the tools to follow the digital trail, wherever it may lead,” said FBI Deputy Director Paul Abbate.
“Thanks to the persistent and dedicated work of our FBI Investigative teams and law enforcement partners, we’re able to uncover the source of even the most sophisticated schemes and bring justice to those who try to exploit the security of our financial infrastructure,” Abbate continued.
Tracing the funds
In 2016 around 120,000 BTC were stolen from Bitfinex during a major hacking incident. While the crypto was worth around $72m at the time it is worth $4.5bn at current market value.
According to court documents, the couple conspired to launder 119,754 stolen bitcoins that were sent to a digital wallet under Lichtenstein’s control.
Over the last five years, approximately 25,000 of those stolen bitcoin were transferred out of Lichtenstein’s wallet via a complicated money laundering process, with some of the stolen funds being deposited into financial accounts jointly controlled by Morgan. The remainder of the stolen funds, comprising more than 94,000 bitcoin, remained in the original wallet used to conduct the attack.
Special agents obtained access to an online account controlled by Lichtenstein, which contained the private keys required to access the digital wallet that directly received the funds stolen from Bitfinex, allowing law enforcement seize and recover more than 94,000 bitcoin, worth $3.6bn. The investigation was a joint effort by the FBI, Homeland Security and the IRS.
“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 US attorney Matthew Graves.
“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,” he continued.
In a statement today Bitfinex said: “We’re pleased that DOJ has recovered a significant portion of the bitcoin stolen during the 2016 hack.”
“We have been cooperating extensively with DOJ since its investigation of this incident began. We appreciate the dedication and hard work by the DOJ team that led to this great success, and we will continue to support their efforts,” the company added.