US federal agents have seized more than 94.000 BTC, worth around $3.600 billion, linked to the 2016 Bitfinex hack, thanks to blockchain transaction transparency.
An investigation by the Department of Justice, along with federal agents from the United States, ended in the seizure of 94.000 BTC and the arrest of two people in New York related to the multi-million dollar hack suffered by the Bitfinex cryptocurrency platform in 2016. According to the report According to the agency, the recent seizure, worth more than $3.600 billion, is the largest ever made by the department.
Deputy Attorney General Lisa O. Monaco said that contrary to what some still think, the cryptocurrencies, “They are not a safe haven for criminals”. Thanks to the transparency and accessibility it allows blockchain, the underlying technology of Bitcoin and nearly every crypto asset on the market, Justice Department officials were able to conduct a thorough investigation to trace the money, even though cybercriminals attempted to obfuscate the origin of the stolen funds using mixing platforms.
The 2016 hack of Bitfinex was one of the largest seen in the crypto industry to date. In total, the cryptocurrency platform lost 119.756 BTC during the attack, currently valued at over $5.140 billion based on the market price of bitcoin. While the Department of Justice has not been able to track down all of the bitcoins stolen from Bitfinex, the recent seizure represents more than a third of the cryptocurrency the platform lost during the hack.
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United States, Bitfinex and Bitcoin
Two people were arrested during the operation carried out by US law enforcement in New York City. According to the Department of Justice, Ilya Lichtenstein, 34, and his wife Heather Morgan, 31, both from NY, may be directly related to the crime of money laundering of Bitfinex funds. Investigations show that Lichtenstein and Morgan apparently attempted to launder the money stolen from the platform, after it was extracted in more than 2.000 unauthorized transactions made by a hacker.
“These unauthorized transactions sent the stolen bitcoin to a digital wallet under Lichtenstein’s control.”, the Justice Department said. Over the past five years, Lichtenstein’s digital wallet has transferred approximately 25.000 BTC of the stolen funds from Bitfinex to different mixing platforms. Part of this value was deposited into financial accounts controlled by Lichtenstein and Morgan.
The remainder of the funds stolen from the platform, plus 94.000 BTC, remained deposited in the digital wallet used by Lichtenstein. DOJ agents executed several search warrants, gaining access to files from a cloud account controlled by Lichtenstein that, in turn, contained the addresses and passwords of the cryptocurrency. private keys of the stolen cryptocurrencies. This allowed the agents to proceed with the seizure and recovery of the funds.
“The file contained a list of 2000 virtual currency addresses, along with the corresponding private keys.”
Lichtenstein and Morgan are expected to appear in court next Tuesday. If convicted on the money laundering and conspiracy charges, they each face up to 25 years in prison, the department said.
Blockchain transparency and crypto surveillance
Matthew M. Graves, the U.S. attorney for the District of Columbia, said the Justice Department and U.S. law enforcement are ready to confront complex criminal and money laundering schemes that could undermine confidence in cryptocurrencies. The attorney general noted that law enforcement is employing advanced investigative techniques to address potential threats to the industry and hold perpetrators accountable.
It is worth clarifying that crypto surveillance companies, such as Chainalysis, CipherTrace, Elliptic, among others, are developing innovative and advanced tools and systems for the identification and tracking of suspicious and illegal transactions on the blockchain, in order to maintain stability and confidence in this emerging technology.
Hacked 6 years ago
Bitfinex, for its part, has responded to the Justice Department's seizure, saying it will continue to work with federal agents to establish its right to the return of the bitcoins stolen during the 2016 hack.
Over the past 6 years, the cryptocurrency platform has been offering rewards to hackers responsible for exploiting the platform to incentivize them to return the funds. Bitfinex had also offered rewards to people who could locate the hackers and the BTC.
Earlier this month, nearly 64.000 BTC linked to Bitfinex were moved to an unknown address in a series of 20 transactions detected by blockchain analytics bot Whale Alerts. After this movement, the wallet that received the BTC had more than 94.640 bitcoins, which were seized by federal agents after executing court search warrants.
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