February 8, 2022

U.S. authorities seize bitcoins stolen from Bitfinex

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U.S. authorities seize bitcoins stolen from Bitfinex

U.S. authorities announced the arrest of individuals involved in the 2016 hacking of the Bitfinex exchange, as well as the confiscation of $3.6 billion in bitcoins.

According to a press release from the U.S. Department of Justice, the defendants are a married couple, Elijah Lichtenstein, 34, and Heather Morgan, 31.

According to court documents, Lichtenstein and Morgan allegedly conspired to launder the proceeds of 119,754 BTC stolen from Bitfinex after a hacker hacked into the platform's systems and made more than 2,000 unauthorized transactions, according to the department's website.

According to officials, the stolen cryptocurrency ended up going to a Liechtenstein-controlled wallet.

Over the past five years, approximately 25,000 of these stolen bitcoins were withdrawn from the Liechtenstein wallet through a complex money-laundering process. This process culminated in the transfer of some of the stolen funds to financial accounts controlled by Liechtenstein and Morgan.

The remainder of the stolen coins, more than 94,000 BTC, remained in the wallet, which was used to generate and store illegal proceeds related to the hacking.

After executing court-authorized search warrants, special agents gained access to files in the online account under Lichtenstein's control. These files contained the private keys needed to access the digital wallet that directly received stolen funds from Bitfinex, allowing the special agents to legally seize and recover more than 94,000 bitcoins stolen from the platform. The recovered bitcoins were valued at more than $3.6 billion at the time of the transaction.

DOJ officials stressed that this is the largest cryptocurrency seizure in the agency's history.

Today, federal law enforcement again demonstrated that we can follow the money with blockchain tools. And we will not allow cryptocurrency to be a safe haven for money laundering or an area of lawlessness within our financial system, said Assistant Attorney General Kenneth Allen Polit, Jr.

If found guilty, Lichtenstein and Morgan could face up to 25 years in prison.

Bitfinex officials said they will continue to work with the U.S. Justice Department to try to recover all the seized bitcoins. If it succeeds, the company will use 80 percent of the proceeds to buy back and burn UNUS SED LEO tokens within 18 months, as stipulated in the white paper.

Jack Evans

About the author

I became a crypto asset owner in 2014, when the industry was in its infancy. Before that, I was working in the classic US and European stock markets. Since then, I have gained extensive experience in both cryptocurrency investing and day trading. I am happy to share with readers my experience with crypto exchanges, DeFi and NFT instruments. 

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