Married Couple Plead Guilty to Money Laundering After Bitfinex Hack
BY PYMNTS | AUGUST 3, 2023
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A married couple from New York City have pleaded guilty to money laundering and conspiracy charges stemming from the hack and theft of 120,000 bitcoin from the global cryptocurrency exchange Bitfinex.
The hack took place in 2016, and customers’ money was lost or stolen in multiple incidents.
Ilya Lichtenstein, 35, pleaded guilty to conspiracy to commit money laundering, a crime that carries a maximum penalty of 20 years in prison, the U.S. Department of Justice said in a Thursday (Aug. 3) press release. Meanwhile, Heather Morgan, 33, pleaded guilty to one count of money laundering conspiracy and one count of conspiracy to defraud the United States, each of which is punishable by up to five years imprisonment.
Lichtenstein and Morgan were arrested in February 2022 after the U.S. government seized 95,000 of the stolen bitcoin from digital wallets in the defendants’ control, according to the press release. At that time, the recovered funds were valued at $3.6 billion.
According to court documents, Lichtenstein employed advanced hacking tools and techniques to infiltrate Bitfinex’s network, the release said. Once inside, he fraudulently authorized more than 2,000 transactions in which 119,754 bitcoin was transferred to his cryptocurrency wallet.
To conceal and launder the stolen funds, Lichtenstein and, at times, Morgan used a number of complex techniques, per the release. These methods included establishing false identities online, using automated systems to aid in their transactions, depositing funds onto darknet markets, exchanging bitcoin for other forms of cryptocurrency such as AEC (anonymity-enhanced cryptocurrency), and even buying and burying gold coins.
Since the defendants’ arrests, the government has seized another $475 million of related funds, according to the press release.
The arrest of Lichtenstein and Morgan in February 2022 has been called the largest financial seizure in history, with the total amount of stolen cryptocurrency valued at $4.5 billion at the time.
Deputy Attorney General Lisa Monaco said at the time of the arrests: “Today’s arrests, and the department’s largest financial seizure ever, show that cryptocurrency is not a safe haven for criminals.”
