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U.S. makes ‘largest financial seizure ever,’ taking control of $3.6 billion in Bitcoin stolen in 2016

(Kitco News) The U.S. Justice Department said it seized more than $3.6 billion worth of Bitcoin stolen in a 2016 hack from the Bitfinex currency exchange.

This marked the largest financial seizure on record based on Bitcoin’s price as of last week, which is when the assets were confiscated, the DOJ said on Tuesday.

“Today’s arrests, and the Department’s largest financial seizure ever, show that cryptocurrency is not a safe haven for criminals,” Deputy Attorney General Lisa Monaco said in a statement. “In a futile effort to maintain digital anonymity, the defendants laundered stolen funds through a labyrinth of cryptocurrency transactions.”

Officials also arrested a husband-and-wife team in Manhattan on Tuesday for allegedly trying to launder the stolen cryptocurrency — Ilya Lichtenstein and his wife, Heather Morgan. Both will be making court appearances later in the day.

The pair was allegedly trying to launder 119,754 Bitcoin stolen from the Bitfinex cryptocurrency exchange in a 2016 hack, court documents showed. The two could face up to 20 years in prison for money laundering and up to five years for conspiracy to defraud the U.S.

“Today, federal law enforcement demonstrates once again that we can follow money through the blockchain, and that we will not allow cryptocurrency to be a safe haven for money laundering or a zone of lawlessness within our financial system,” said Assistant Attorney General Kenneth Polite Jr. of the Justice Department’s Criminal Division.

During the August 2016 cyberattack, a hacker got into Bitfinex’s system and carried out more than 2,000 unauthorized transactions, which transferred the stolen crypto into a digital wallet that was linked to Lichtenstein, officials said. Bitfinex is a cryptocurrency exchange owned by iFinex Inc.

In 2016, the total value of Bitcoin stolen was worth about $71 million. More than five years later, the total has risen to about $4.5 billion, the Justice Department said.

A portion of the stolen money was cashed out and used to buy NFTs and gold.

Bitfinex on Tuesday said that it was “pleased” that the U.S. Department of Justice has recovered “a significant portion of the bitcoin stolen” and added that it has been “cooperating extensively” with the DOJ since the investigation began.

“Bitfinex will work with the DOJ and follow appropriate legal processes to establish our rights to a return of the stolen bitcoin. Bitfinex intends to provide further updates on its efforts to obtain a return of the stolen bitcoin as and when those updates are available,” the company said in an online post.

The DOJ plans to set up legal court proceedings that will help the victims get their stolen Bitcoin back.

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Officials also arrested a husband-and-wife team in Manhattan on Tuesday for allegedly trying to launder the stolen cryptocurrency — Ilya Lichtenstein and his wife, Heather Morgan. Both will be making court appearances later in the day.

Source: https://www.kitco.com/news/2022-02-08/U-S-makes-largest-financial-seizure-ever-taking-control-of-3-6-billion-in-Bitcoin-stolen-in-2016.html

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