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Bitfinex Hack: FBI nabs couple over $4.5 billion stolen crypto

Bitfinex said it would work with the Justice Department to regain possession of the stolen bitcoin.

• February 9, 2022
Bitcoin
A bitcoin used to illustrate the story

The Federal Bureau of Investigation has arrested and charged Ilya Lichtenstein and Heather Morgan with conspiracy to launder cryptocurrency that was stolen during the 2016 hack of Bitfinex, a virtual currency exchange platform.

The Department of Justice said on Tuesday that Ilya Lichtenstein and his wife, Heather Morgan, were scheduled to make their initial appearances in a federal court in Manhattan.

“Today, federal law enforcement demonstrates once again that we can follow 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,” said Assistant Attorney General Kenneth A. Polite Jr. of the Justice Department’s Criminal Division.

The couple were charged with conspiracy to commit money laundering, which has a maximum sentence of 20 years in prison, as well as conspiracy to defraud the United States, which carries a maximum sentence of five years in prison.

According to court documents, they allegedly conspired to launder the proceeds of 119,754 bitcoin that had been stolen from Bitfinex’s platform after a hacker breached Bitfinex’s systems and initiated more than 2,000 unauthorised transactions. Those unauthorised transactions sent the stolen bitcoin to a digital wallet under Mr Lichtenstein’s control.

The court documents added that over the last five years, 25,000 of those stolen bitcoins had been transferred out of Mr Lichtenstein’s wallet and ended with some of the stolen funds being deposited into financial accounts controlled by the couple.

The remainder of the stolen funds, comprising more than 94,000 bitcoin, remained in the wallet used to receive and store the illegal profits from the hack. Special agents obtained access to Mr Lichtenstein’s online account after the execution of court-authorised search warrants of online accounts.

The recovered bitcoin was valued at over $3.6 billion at the time of seizure. The Department of Justice said the transactions at the time were valued at $71 million in Bitcoin, but with the rise in the currency’s value, it is now valued at over $4.5 billion.

In a statement, Bitfinex said it would work with the Justice Department and follow appropriate legal processes to regain possession of the stolen bitcoin.

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