US Couple Who Laundered $4.5 Billion in Bitcoin Arrested

A Manhattan couple has been arrested by the FBI after attempting to launder 119,754 stolen Bitcoin.

Ilya Lichtenstein, 34, and Heather Morgan, 31, are accused of attempting to launder the Bitcoin after it was stolen by a hacker through more than 20,000 unauthorized transactions that took place on Bitfinex in 2018.

Authorities have already recovered $3.6 billion of the stolen assets. The Justice Department says that the assets were valued at $71 million at the time the crime occurred but have now risen to a value of $4.5 billion.

“As the complaint alleges, the FBI and federal prosecutors were able to trace the movement of Bitcoin from this hack,” said Matthew Graves, the US Attorney for the District of Columbia.

The couple’s arrest is the largest financial seizure in the history of the United States Department of Justice.

“As cryptocurrency becomes widely adopted, we must prevent its use in money laundering,” said Deputy Attorney General Lisa Monaco in a statement. “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.”

Hackers steal over $90 million from Japanese crypto exchange

This is not the first high-profile crime to rock a cryptocurrency exchange. This past August, hackers stole over $90 million from a Japanese cryptocurrency exchange called Liquid. The firm announced that hackers had gained access to wallets they host online, gleaning roughly $91 million in crypto assets. A total of $16 million of these were frozen as other exchanges pounced on the theft. London-based blockchain analysis provider Elliptic estimates the losses to be around $97 million.

Elliptic also said it was crucial to note that $45 million of these losses were Ethereum tokens, “which are being converted into Ether using decentralized exchanges,” enabling “the hacker to avoid having these assets frozen.”

They further explained how the hackers planned to launder the Ether:

“This Ether is now being laundered through Tornado Cash, a smart-contract-based mixer used to obscure the blockchain money trail. Close to $20 million of the stolen assets have been sent to Tornado, as of the last update of this article. Exchanges and other crypto service providers should be on the alert for large deposits that originate from Tornado cash.”

This is the second time in ten months that liquid has been the victim of a hack. In November 2020 someone gained access to the firm’s document storage infrastructure, but no funds were stolen.

Liquid has halted all crypto withdrawals and asked its customers to refrain from crypto deposits until their system is secure. Fiat currency withdrawals and deposits can still be made.