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Future of Money
Invalid DateInvalid DateUpdated 38 minutes ago

U.S. ARRESTS COUPLE FOR ALLEGEDLY LAUNDERING $4.5 BILLION IN CRYPTO TIED TO
BITFINEX HACK

By Sarah N. Lynch, Raphael Satter

3 Min Read

WASHINGTON (Reuters) - The FBI arrested a husband and wife on Tuesday morning,
alleging they conspired to launder cryptocurrency stolen from the 2016 hack of
virtual currency exchange Bitfinex, and said law enforcement has already seized
over $3.6 billion in cryptocurrency tied to the hack.

FILE PHOTO: Photo illustration of Bitfinex cryptocurrency exchange website taken
September 27, 2017. Picture taken September 27, 2017. REUTERS/Dado
Ruvic/Illustration

The action represents the Justice Department’s largest-ever financial seizure,
Deputy Attorney General Lisa Monaco said, adding in a statement that it shows
cryptocurrency is “not a safe haven for criminals.”

Ilya Lichtenstein, 34, and his wife Heather Morgan, 31, both of Manhattan, are
scheduled to make their initial appearances in federal court Tuesday at 3:00
p.m. in the U.S. District Court for the Southern District of New York.

The case was filed in a federal court in Washington, D.C.

The pair is accused of conspiring to launder 119,754 bitcoin that was stolen,
after a hacker attacked Bitfinex and initiated more than 2,0000 unauthorized
transactions.

Justice Department officials said the transactions at the time were valued at
$71 billion in Bitcoin, but with the rise in the currency’s value, it is now
valued at over $4.5 billion.

“As the complaint alleges, the FBI and federal prosecutors were able to trace
the movement of Bitcoin from this hack,” said Matthew Graves, the U.S. Attorney
for the District of Columbia.

He added that the money moved through a major darknet exchange tied to a host of
crimes, as well as cryptocurrency addresses tied to child sexual abuse
materials.

Tuesday’s criminal complaint came more than four months after Monaco announced
the department was launching a new National Cryptocurrency Enforcement Team,
which is comprised of a mix of anti-money laundering and cybersecurity experts.

Cyber criminals who attack companies, municipalities and individuals with
ransomware often demand payment in the form of cryptocurrency.

In one high-profile example last year, former partners and associates of the
ransomware group REvil caused a widespread gas shortage on the U.S. East Coast
when it used encryption software called DarkSide to launch a cyber attack on the
Colonial Pipeline.

The Justice Department was later recovered some $2.3 million in cryptocurrency
ransom that Colonial paid to the hackers.

Reporting by Sarah N. Lynch and Raphael Satter; Editing by Richard Chang

Our Standards: The Thomson Reuters Trust Principles.

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