Couple arrested over funds linked to Bitfinex hack

The US Department of Justice has released a statement announcing it has recovered $3.6bn in bitcoin (BTC) stolen during the 2016 hack of currency exchange Bitfinex.

Tech entrepreneurs Heather Morgan, 31, and her husband IIya Lichtenstein, 34, were arrested in Manhattan for the theft of around 120,000 BTC. The hackers used a particular set of transactions sent to multiple crypto wallets.

Although the two have not been charged with the overall Bitfinex hack itself, they are set to appear in court under the charges of conspiracy to commit money laundering and defrauding the US government.

The 2016 hack is ongoing to this day. Money was distributed out of Bitfinex in around 2,000 separate transactions to wallets on other platforms.

Most of the funds were put into accounts on Alpha Bay, the dark-web platform, but continued to move, circulating the world.

More recently, the funds that were hacked and stolen have been transferred to an unknown wallet, at a total value of $750m worth of BTC.

The value of BTC then was worth around $71m. It has been said that today’s value would see the BTC value stand at $4.5bn.

The Justice Department’s Criminal Division Assistant Attorney General Kenneth Polite said: “Today, federal law enforcement demonstrates once again that we can follow the money through the blockchain, and that we will not allow cryptocurrency to be a safe haven for money laundering or a zone of lawlessness within our financial system.

“The arrests today show that we will take a firm stand against those who allegedly try to use virtual currencies for criminal purposes.”

In a statement, Bitfinex announced it will work with the Department of Justice to return the money cooperating alongside the authorities.

The company added: “We want to express our appreciation for the dedication and hard work by the DOJ team that led to this great success. We will continue to support their efforts.”

It seems as if this was one move too many for the attacker’s ongoing movement of funds. It was only a matter of time before a shift into an exchange or a known wallet would give authorities the information required to recover lost funds from illegitimate crypto handling.

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Updated: 02/09/2022 — 16:00