The Justice Department said Tuesday it has seized more than $3.6 billion in cryptocurrency and arrested two people in connection with the 2016 hack of a virtual currency exchange.
It’s the Justice Department’s largest ever financial seizure, officials said.
“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 blockchain is a shared, online ledger of cryptocurrency transactions.
Arrested in Manhattan Tuesday were Ilya Lichtenstein, 34, and his wife, Heather Morgan, 31. They are scheduled to make initial appearances in federal court at 3 p.m. in Manhattan.
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According to court documents, Lichtenstein and Morgan allegedly conspired to launder the proceeds of 119,754 bitcoin that were stolen from a platform called Bitfinex after a hacker breached Bitfinex’s systems and initiated more than 2,000 unauthorized transactions.
The stolen bitcoin was sent to a digital wallet under Lichtenstein’s control, prosecutors said.
Prosecutors said that around 25,000 of those stolen bitcoin were transferred out of Lichtenstein’s wallet through a series of laundering transactions that ended with some of the stolen funds being deposited into financial accounts controlled by Lichtenstein and Morgan.
The remainder of the stolen funds, more than 94,000 bitcoin, remained in the wallet used to receive and store the illegal proceeds from the hack, the DOJ said. On Tuesday, the price of one bitcoin was around $43,400. The recovered bitcoin was valued at over $3.6 billion at the time of seizure. At the time it was stolen, it was worth $71 million.
Investigators used search warrants of online accounts controlled by Lichtenstein and Morgan to obtain the private keys that allowed special agents to lawfully seize and recover more than 94,000 bitcoin that had been stolen from Bitfinex, prosecutors said.
“Cryptocurrency and the virtual currency exchanges trading in it comprise an expanding part of the U.S. financial system. But digital currency heists executed through complex money laundering schemes could undermine confidence in cryptocurrency,” said U.S. Attorney Matthew M. Graves for the District of Columbia. “The Department of Justice and our Office stand ready to confront these threats by using 21st century investigative techniques to recover the stolen funds and to hold the perpetrators accountable.”
The criminal complaint alleges that Lichtenstein and Morgan used sophisticated laundering techniques to try to spread the Bitcoin around outside the view of the government. But it didn’t work.
“Criminals always leave tracks, and today’s case is a reminder that the FBI has the tools to follow the digital trail, wherever it may lead,” said FBI Deputy Director Paul M. Abbate. “Thanks to the persistent and dedicated work of our FBI Investigative teams and law enforcement partners, we’re able to uncover the source of even the most sophisticated schemes and bring justice to those who try to exploit the security of our financial infrastructure.”
Source: | This article originally belongs to Nbcnews.com
