On Tuesday, the US Justice Department said that it had discovered the greatest cryptocurrency theft to date. Thus, seizing $3.6 billion in bitcoin linked to the 2016 hack of digital currency exchange Bitfinex. Money laundering allegations were against a husband and wife.
On Tuesday morning, Ilya “Dutch” Lichtenstein, 34, and his wife Heather Morgan Morgan, 31, were arrested in Manhattan. Prosecutors say they spent the unlawful proceeds on gold and non-fungible tokens, as well as a $500 Walmart gift card.
It was the Justice Department’s greatest financial seizure, according to Deputy Attorney General Lisa Monaco. She stressed that bitcoin is not a safe haven for criminals. ()
Cryptocurrency theft: Unauthorized transactions
Conspiracies to defraud the United States and money laundering are among the charges against Lichtenstein and Morgan. In a federal court in Washington, DC, the lawsuit was filed.
During their preliminary hearings in federal court on Tuesday, US Magistrate Judge Debra Freeman set Lichtenstein’s bond at $5 million and Morgan’s at $3 million. She insisted that their parents place a security deposit on their homes as a guarantee that they would appear in court.
The couple has allegations against them of plotting to launder 119,754 bitcoins stolen from Bitfinex after an attacker launched over 2,000 unauthorized transactions. The trades were worth $71 million in bitcoin at the time. But the currency’s value has since risen to roughly $4.5 billion.
2017 bust
The 2017 bust of an underground digital market used to launder some of the funds may have provided a crucial clue. According to US officials, some of the funds were transferred to AlphaBay. It is a black web version of eBay that allows anyone to sell anything.
Elliptic is a cryptocurrency tracking company. It believes it’s possible that when AlphaBay went down, it gave police access to internal transaction data linked to a cryptocurrency account in Lichtenstein’s name.
Bitfinex said it was working with the Department of Justice to verify its rights of the bitcoin stolen.
According to the DOJ, Lichtenstein, and Morgan also tried to launder money by using a network of currency exchangers or by pretending that the funds were payments to Morgan’s startup.
House arrest
Morgan and Lichtenstein, who also have dual US-Russian citizenship, nodded as Freeman warned them that fleeing would result in severe consequences.
Both will be under house arrest with electronic monitoring. They will be prohibited from transacting in bitcoin until their cases are resolved, according to Freeman. Later, she said, a court in Washington, where more hearings would be there, could impose different conditions.
