Over $3.6B of bitcoin seized in DOJ’s biggest finance bust ever – CNET

Over $3.6B of bitcoin seized in DOJ’s biggest finance bust ever – CNET


In a milestone hack of what was one of the world’s biggest crypto companies, 119,000 bitcoin were stolen from Hong Kong’s Bitfinex exchange back in 2016. On Tuesday morning, nearly six years later, the Department of Justice arrested a married New York couple, accusing them of laundering the stolen cryptocurrency

Officials seized over 94,000 bitcoin from the Ilya Lichtenstein, 34, and his wife, Heather Morgan, 31. The DOJ said the bitcoin are valued at $3.6 billion, making it the largest financial seizure in history. The couple are accused of conspiracy to launder, not of actually committing the hack. It’s a historic day in cryptocurrency, and even for the DOJ.

But that’s not what’s caught people’s attention.

As momentous as the bust is, Heather Morgan has garnered a huge amount of interest because of her bizarre online past. On her LinkedIn profile she describes herself as an economist, entrepreneur and irreverent rapper. That’s led to viral sharing of articles she’s written for the likes of Forbes, including one titled “Experts share tips to protect your business from cybercriminals”. That article includes comments from BitGo, which provided security support for Bitfinex at the time of the 2016 hack.

Then there are the rap videos, performed under the Razzlekahn alias,wherein she variously calls herself the “Turkish Martha Stewart” and “The Crocodile of Wall Street.” Her song Versace Bedoin begins: “This song is for the entrepreneurs and hackers, all the misfits and smart slackers.” The videos have been taken down on YouTube, but remain shared on Twitter.

Yet the DOJ’s ability to track the allegedly laundered bitcoin is significant. Cryptocurrencies like bitcoin and ether are exchanged on decentralized blockchains, which allows users to send and recieve these tokens with anonymity. That anonymity has attracted a criminal element, with bitcoin and its ilk often being used as black market currency. The DOJ calls Tuesday’s arrests proof that blockchains are not iron defenses against law enforcement.

“We will not allow cryptocurrency to be a safe haven for money laundering or a zone of lawlessness within our financial system,” Assistant Attorney General Kenneth Polite Jr. said. 

The DOJ said the Bitfinex hacker sent 119,754 bitcoin to Lichtenstein’s digital wallet over a series of 2,000 transactions. Around 25,000 bitcoin were transferred out of Lichtenstein’s wallet — today worth about $1 billion. Lichtenstein attempted to disguise these stolen tokens, but the DOJ said it was able to follow his transactions on the blockchain. It alleges that some bitcoin wwere used to buy gold and NFTs, while others were translated into funds that appeared in Lichstentein and Morgan’s bank accounts. 

The remaining 94,000 bitcoin are what was seized on Tuesday. Both Lichtenstein and Morgan face up to 20 years in prison for conspiracy to commit money laundering charges, plus 5 years for conspiracy to defraud the United States charges. 

The 119,756 bitcoin stolen from Bitfinex were worth $72 million at the time the hack was made public, according to the New York Times. The news was able to plunge bitcoin down 20% to around $560. The price of bitcoin now stands at $43,400.

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