A NYC couple was arrested in Manhattan for an alleged conspiracy to launder cryptocurrency that was stolen during the 2016 hack of Bitfinex, a virtual cryptocurrency exchange, presently valued at approximately $4.5 billion. The government has seized over $3.6 billion in cryptocurrency linked to the scam.
“Today’s arrests, and the department’s largest financial seizure ever, show that cryptocurrency is not a safe haven for criminals. In a futile effort to maintain digital anonymity, the defendants laundered stolen funds through a labyrinth of cryptocurrency transactions. Thanks to the meticulous work of law enforcement, the department once again showed how it can and will follow the money, no matter what form it takes,” said Deputy Attorney General, Lisa O. Monaco, in a statement.
The couple are Ilya Lichtenstein and Heather Morgan, Morgan is a contributor at both Inc. and Forbes, and ironically her author profile says that “when she’s not reverse-engineering black markets to think of better ways to combat fraud and cybercrime, she enjoys rapping and designing streetwear fashion,”
Lichtenstein is a founder at Endpass, a blockchain startup, an early-stage angel investor, a mentor at 500 startups, and an advisor at SalesFolk according to his Linkedin.
According to court documents, the couple allegedly conspired to launder the proceeds of 119,754 bitcoin that were stolen from Bitfinex’s platform after a hacker breached Bitfinex’s systems and initiated more than 2,000 unauthorized transactions. Those unauthorized transactions sent the stolen bitcoin to a digital wallet under Lichtenstein’s control. Over the last five years, approximately 25,000 of those stolen bitcoin were transferred out of Lichtenstein’s wallet via a complicated money laundering process
The remainder of the stolen funds, comprising more than 94,000 bitcoin, remained in the wallet used to receive and store the illegal proceeds from the hack. After the execution of court-authorized search warrants of online accounts controlled by Lichtenstein and Morgan, special agents obtained access to files within an online account controlled by Lichtenstein.
Cryptocurrency crimes skyrocketed in 2021, with a new report finding scammers took $14 billion worth of crypto last year. That’s almost twice the $7.8 billion taken by scammers in 2020, according to blockchain data firm Chainalysis’ report released this January.
Chainalysis also reported that North Korean cybercriminals launched at least seven attacks on cryptocurrency platforms and extracted nearly $400 million worth of digital assets in 2021. These attacks targeted primarily investment firms and centralized exchanges according to the report.
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