A married couple from New York Metropolis has pleaded responsible to cash laundering expenses in reference to the 2016 hack of cryptocurrency inventory trade Bitfinex, ensuing within the theft of about 120,000 bitcoin.
The event comes greater than a yr after Ilya Lichtenstein, 35, and his spouse, Heather Morgan, 33, had been arrested in February 2022, following the seizure of roughly 95,000 of the stolen crypto belongings that had been held by the defendants. The funds had been valued at $3.6 billion on the time.
Since then, the U.S. authorities mentioned it has since seized one other roughly $475 million tied to the breach.
“Lichtenstein used various superior hacking instruments and methods to realize entry to Bitfinex’s community,” the U.S. Division of Justice (DoJ) mentioned. “As soon as inside their techniques, Lichtenstein fraudulently licensed greater than 2,000 transactions through which 119,754 bitcoin was transferred from Bitfinex to a cryptocurrency pockets in Lichtenstein’s management.”
He’s additionally alleged to have roped in his spouse to launder the crypto proceeds utilizing strategies each numerous and complicated: organising on-line accounts by way of pretend identities, exchanging a bit of the bitcoin into gold cash and different crypto belongings, and overlaying up the path by sending the funds by mixing companies.
A big portion of the unlawful cash was moved to the now-defunct darknet market AlphaBay, blockchain analytics agency Chainalysis famous final month, which it mentioned was used as a mixer by depositing the stolen Bitcoin and withdrawing equal quantities.
Following the regulation enforcement takedown of AlphaBay, the cryptocurrency was despatched to different mixers and digital foreign money exchanges (VCEs). Then in 2020 and 2021, part of the digital belongings had been transformed to fiat foreign money and moved to a U.S. checking account.
The pair additional bought reward playing cards for Walmart and different companies at one other VCE (named VCE 10 in courtroom paperwork) – which provided a specialised service dedicated to crypto-for-gift card trades – utilizing the bitcoin that was moved to the trade beforehand.
“In the long run, the reward card purchases described above supplied essential clues within the investigation,” Chainalysis mentioned.
“After tracing the preliminary actions of cryptocurrency, investigators found {that a} private pockets tackle starting with 36B6mu, which had acquired over $1 million price of Bitcoin related to the Bitfinex hack, supplied funding for the account at VCE 10 used to buy reward playing cards.”
The probe additionally discovered that the Walmart reward card particularly was redeemed by the retail large’s iPhone app underneath an account in Morgan’s identify, enabling authorities to get a search warrant for the couple’s residence and their cloud storage accounts.
The latter turned out to be a serious break, because it led to the invention of recordsdata containing particulars of the cryptocurrency addresses used to maneuver the stolen funds, together with their personal keys, together with the fraudulent data used to open accounts at numerous crypto exchanges and their plans to amass pretend passports.
Lichtenstein, a Russian nationwide, faces a most penalty of 20 years in jail, with Morgan, who pleaded responsible to 1 depend of cash laundering conspiracy and one depend of conspiracy to defraud the U.S., awaits a most jail time period of 10 years.
