Editor's note: According to Bloomberg Finance, Ilya Lichtenstein and Heather Morgan were arrested in New York on Tuesday at 7 a.m. local time on suspicion of conspiracy to launder cryptocurrencies, and then appeared in federal court in Manhattan. The U.S. government said it confiscated about $3.6 billion worth of cryptocurrencies from the couple, the largest financial seizure ever made. The two allegedly conspired to launder 119,754 bitcoins (from the hacking of virtual currency exchange Bitfinex in 2016) and are currently worth about $4.5 billion.
In August 2016, on a dark and windy night in a month, digital currency exchange Bitfinex was as calm as ever.
Suddenly, the "male and female thieves" fell from the sky, looted the exchange, and took 119754 bitcoins with them.
The case became the second largest bitcoin theft in history after Japan's "Mr Gox exchange theft." Affected by this, Bitcoin directly plunged 23% on the day.
The US authorities could not bear it any longer, and immediately wanted the whole network.
After nearly 2,000 days and nights, after the value of the stolen bitcoins has soared from $71 million to $4.5 billion, on the solemn day of February 9, 2022, the U.S. Department of Justice finally announced with excitement:
The male and female thieves have been caught!
Ilya Lichtenstein and his wife Heather Morgan were arrested in Manhattan, U.S.A., on February 8, according to the official website of the U.S. Department of Justice's Office of Public Affairs on February 8.
Ilya Lichtenstein, 34, born in Russia and moved to the United States at the age of 6 (according to Bloomberg, who has dual U.S. and Russian citizenship) and is an alumnus of the founder of the famous Silicon Valley accelerator program Y Combinator. He co-founded MixRank data and ad tech startups and received funding from Mark Cuban, the most prominent investor in the United States.
In addition, his personal hobby is to warn people on Twitter to beware of hacking attacks.
Heather Morgan, 31, has a fairly rich resume. She is a young corporate marketer, rapper and magazine columnist.
Echoing her husband's hobbies, part of her latest article is titled: How to Protect Your Business from Hackers, and the article also includes interviews with digital currency exchange founders about how to prevent fraud.
How to say it, what a coincidence.
014.5 billion was washed away by "complex technology" 900 million,
But the usage is rather earthy
In addition to the arrest of the two on the spot, $3.6 billion of bitcoin stolen from bitfinex exchange, which has not yet been transferred, was also seized.
So in terms of amount, this operation can be called the largest financial seizure in the history of the US Department of Justice.
Now that the stolen goods have been obtained, the case immediately enters the judicial process.
According to court documents, the "male and female thieves" first initiated more than 2,000 unauthorized transactions on the Bitfinex exchange, then successfully stole bitcoins and sent them from the exchange platform to Lichtenstein's digital wallet.
Over the next five years, about 25,000 stolen bitcoins were transferred out of digital wallets, some of which were deposited into financial accounts in the couple's name.
The Justice Department said the process involves "sophisticated money laundering techniques," including the use of fictitious identities to create online accounts, the use of computer programs to automate transactions, the conversion of Bitcoin into other digital currencies, and more.
In short, under the efforts of this "technology flow" couple, 25,000 bitcoins were successfully "laundered", and more than 94,000 bitcoins in the digital wallet were not transferred at the time of seizure.
But their disposal of the money is actually quite simple.
In addition to buying some gold and digital currency, a portion of the money was used to buy Walmart gift cards, pay for Uber and buy games on the PlayStation.
02 The Ministry of Justice raised its eyebrows and the exchange raised its eyebrows
Although only $3.6 billion is left for $4.5 billion, the U.S. Department of Justice is finally able to raise its eyebrows.
Deputy Attorney General Lisa Monaco issued a statement:
Although the defendants laundered the stolen funds through dazzling technology, it proved futile. The successful arrest shows that the digital currency sector is not a safe haven for criminals.
U.S. Deputy Attorney General Lisa Monaco (Screenshot from Twitter)
Kenneth Polite, an assistant attorney in the Department of Justice's Criminal Division, said:
Law enforcement has once again proved that we can track funds through blockchain, and digital currencies will not become extralegal places within the financial system.
In addition to the raised judicial department, the happiest is naturally the Bitfinex exchange.
Bitfinex states in the statement:
We are pleased that the U.S. Department of Justice announced today that it successfully recovered most of the bitcoin stolen during the August 2016 security breach. Since the Ministry of Justice launched the investigation, our two sides have been working extensively together and will continue to do so in the future.
03 "Male and female thieves" are eclipsed or face decades of accusations
In contrast, however, the future and fate of these two are more tragic. The two lose every game carelessly, and what awaits them could be decades in prison.
The couple currently face charges of "conspiracy to launder money" and "conspiracy to commit fraud", which are punishable by up to 20 years in prison and 5 years in prison, respectively.
Now some people on the Internet have ridiculed that compared with the funds that have been washed away, if the "male and female thieves" can return the stolen funds as soon as possible, they may earn more.
Because Bitfinex said in 2020 that if hackers are able to return stolen assets, then they can get 25% of the total stolen assets.
But in fact, they were (strangely) not accused of hacking.
"The investigation is still ongoing." Justice Department officials said.