NYC Couple Pleads Guilty to Money Laundering in $3.6 Billion Bitfinex Hack

A married couple from New York Metropolis has pleaded guilty to cash laundering rates in connection with the 2016 hack of cryptocurrency stock exchange Bitfinex, resulting in the theft of about 120,000 bitcoin.

The advancement comes more than a year immediately after Ilya Lichtenstein, 35, and his spouse, Heather Morgan, 33, ended up arrested in February 2022, subsequent the seizure of about 95,000 of the stolen crypto belongings that have been held by the defendants. The funds were valued at $3.6 billion at the time.

Considering that then, the U.S. authorities reported it has since seized another roughly $475 million tied to the breach.

“Lichtenstein used a amount of sophisticated hacking applications and techniques to obtain accessibility to Bitfinex’s network,” the U.S. Division of Justice (DoJ) said. “Once inside of their systems, Lichtenstein fraudulently licensed much more than 2,000 transactions in which 119,754 bitcoin was transferred from Bitfinex to a cryptocurrency wallet in Lichtenstein’s control.”

He is also alleged to have roped in his wife to launder the crypto proceeds using approaches both equally various and intricate: setting up on the web accounts via pretend identities, exchanging a chunk of the bitcoin into gold cash and other crypto belongings, and covering up the trail by sending the cash as a result of mixing expert services.

A massive portion of the illegal income was moved to the now-defunct darknet sector AlphaBay, blockchain analytics business Chainalysis observed final thirty day period, which it claimed was utilised as a mixer by depositing the stolen Bitcoin and withdrawing equivalent quantities.

Following the law enforcement takedown of AlphaBay, the cryptocurrency was despatched to other mixers and digital forex exchanges (VCEs). Then in 2020 and 2021, a portion of the digital belongings had been converted to fiat forex and moved to a U.S. financial institution account.

The pair more ordered gift playing cards for Walmart and other corporations at one more VCE (named VCE 10 in courtroom paperwork) – which presented a specialised service devoted to crypto-for-reward card trades – utilizing the bitcoin that was moved to the trade previously.

“In the stop, the reward card buys described higher than furnished crucial clues in the investigation,” Chainalysis explained.

“Immediately after tracing the initial actions of cryptocurrency, investigators found out that a personal wallet handle beginning with 36B6mu, which experienced received over $1 million truly worth of Bitcoin related with the Bitfinex hack, presented funding for the account at VCE 10 applied to purchase reward playing cards.”

The probe also discovered that the Walmart gift card especially was redeemed as a result of the retail giant’s iPhone app under an account in Morgan’s title, enabling authorities to get a search warrant for the couple’s residence and their cloud storage accounts.

The latter turned out to be a significant break, as it led to the discovery of data files made up of specifics of the cryptocurrency addresses employed to transfer the stolen resources, such as their private keys, alongside with the fraudulent information utilized to open accounts at different crypto exchanges and their plans to get phony passports.

Lichtenstein, a Russian nationwide, faces a optimum penalty of 20 a long time in prison, with Morgan, who pleaded responsible to a person depend of money laundering conspiracy and a person count of conspiracy to defraud the U.S., awaits a optimum jail time period of 10 yrs.

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Some parts of this article are sourced from:
thehackernews.com