Couple Arrested in New York Who Are Accused For Stolen BTC Worth 4.5 Billion

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A New York couple was arrested Tuesday and charged with conspiracy to launder billions of dollars in stolen cryptocurrencies in a 2016 hack of virtual exchange, the Justice Department said.In addition to the arrests, federal agents revealed that the department seized some $3.6 billion in cryptocurrencies linked to the hack of Bitfinex, an online exchange that had its systems breached nearly six years ago. This is the largest financial seizure made by the Department of Justice.The stolen cryptocurrencies, worth $71 million at the time of the theft, are now worth $4.5 billion, according to the sources.

Ilya Lichtenstein and his wife Heather Morgan were arrested Tuesday morning in Manhattan to answer charges of conspiracy to launder money and conspiracy to defraud the United States. It was unclear if they had lawyers or people who could speak on their behalf.

According to prosecutors, Lichtenstein and Morgan used complex techniques to receive the stolen cryptocurrency in a digital wallet controlled by them and hide the transactions and movement of money. They collected millions of dollars from cryptocurrency ATM transactions to buy gold and non-expendable tokens (NFTs) as well as more conventional items like Walmart gift cards for their personal expenses.

Over the past five years, around 25,000 of those stolen bitcoins were transferred to Lichtenstein’s digital wallet through a complicated money laundering process that ended with the deposit of some of the stolen funds into financial accounts controlled by Lichtenstein and Morgan. The rest of the stolen funds remained in the wallet used to receive and store the illegal proceeds from the hack.

After the execution of search warrants authorized by the online court of accounts controlled by Lichtenstein and Morgan, special agents gained access to the files. The recovered bitcoin was valued at more than $3.6 billion at the time of the seizure.

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The criminal complaint alleges that Lichtenstein and Morgan employed various laundering techniques, including using false identities to set up online accounts; use of software to automate transactions; deposit stolen funds into accounts at a variety of virtual currency exchanges and darknet marketplaces; convert bitcoin to other forms of virtual currency, including Enhanced Virtual Currency with Anonymity (AEC); and the use of U.S.-based business accounts to legitimize your banking activity.

“Today’s arrests and the largest financial seizure ever made by the department show that cryptocurrencies are not a safe haven for criminals,” said Deputy Attorney General Lisa O. Monaco. “In a futile effort to maintain digital anonymity, the defendants laundered stolen funds through a maze of cryptocurrency transactions. Thanks to the meticulous work of law enforcement, the department once again demonstrated how it can and will follow the money trail, no matter what form it takes.

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