Justice Department seizes 3.6 billion in Bitcoin and arrests married couple | World News,The Indian Express
The couple, Ilya Lichtenstein, 34, and Heather Morgan, 31, were charged in a criminal complaint with conspiring to launder 119,754 bitcoins that had been stolen in 2016 from Hong Kong-based Bitfinex, one of the the largest virtual currency exchanges in the world. .
The value of the coin at the time of its seizure last week makes it the largest financial seizure ever made by the department, authorities said.
Reading: Justice seizes billion bitcoin married couple
A Justice Department official declined to comment on whether Lichtenstein and Morgan had been involved in the hack itself.
The leak in 2016 came among a series of attacks on exchange houses that allowed the theft of large amounts of digital currency. even when stolen funds were recovered, the thefts underscored security vulnerabilities in the relatively new world of cryptocurrencies. in some cases, the incidents drastically affected the values of cryptocurrencies.
After the hack of bitfinex, one of the largest exchanges in the history of the cryptocurrency market, the value of bitcoin initially plummeted by around 20%.
Tuesday’s arrests “show that cryptocurrencies are not a safe haven for criminals,” Lisa Monaco, deputy attorney general, said in a statement. “In a futile effort to maintain digital anonymity, the defendants laundered the stolen funds through a maze of cryptocurrency transactions.”
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lichtenstein and morgan appeared in federal court in manhattan in new york on Tuesday afternoon.
Lichtenstein, nicknamed Dutch, has US and Russian citizenship and describes himself as a tech entrepreneur, according to the complaint. Morgan describes herself on her LinkedIn page as “a serial entrepreneur” and “irreverent comedic rapper.” The complaint, which also accuses the couple of conspiring to defraud the United States, suggests Morgan also uses the alias Razzlekhan.
According to court documents, the hacker who breached bitfinex’s systems initiated 2,000 transactions to send 119,754 stolen bitcoins to a digital wallet controlled by lichtenstein.
Over the past five years, about 25,000 of those bitcoins were transferred from Lichtenstein’s wallet through a complicated series of transactions intended to hide that the currency had been stolen from Bitfinex, the Justice Department said.
But the researchers tracked the movement of bitcoins on the blockchain, the permanent fixed electronic ledger that records each time a bitcoin is moved to a new digital wallet. And some of those funds were eventually deposited into financial accounts controlled by Lichtenstein and Morgan, who used some of the money to purchase items like gold, non-fungible tokens and a Walmart gift card, according to the complaint.
Law enforcement officials gained access to Lichtenstein’s wallet on January 1. on January 31, after they obtained a search warrant that gave them access to encrypted files in lichtenstein’s cloud storage account.
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The next day, investigators seized the remaining 94,636 bitcoins in that wallet, worth more than $3.6 billion, according to court documents. the total of 119,754 bitcoins that were stolen, worth about $71 million when bitfinex was hacked in 2016, are now worth more than $4.5 billion, according to the justice department.
The arrest shows that “we will not allow cryptocurrencies to be a safe haven for money laundering or a zone of lawlessness within our financial system,” kenneth a. educate jr., head of the criminal division of the justice department, in a statement.
With more Americans buying and selling cryptocurrencies like bitcoin, regulators have placed some major exchanges in the US under official supervision.
but cryptocurrencies move through decentralized computer networks that are not under the control of any particular government or company, so most transactions still take place on largely unregulated exchanges like bitfinex, which they provide consumers with little information about their operations.
Lack of regulation has led to a number of problems in the world of virtual currency exchanges, threatening to undermine consumer confidence in cryptocurrencies and slow down their widespread adoption. the first bitcoin exchange, mt. gox, collapsed in 2014 after hackers breached its security systems and siphoned $500 million in customer money.
and law enforcement officials have filed criminal charges against exchange owners suspected of facilitating criminal activity.
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