The U.S. Justice Department has seized $3.6 billion worth of Bitcoin, marking the largest seizure of cryptocurrency of all time and the biggest financial seizure ever.
In a statement, the Justice Department says it seized over 119,754 BTC from 34-year-old Ilya Lichtenstein, and his wife, 31-year old Heather Morgan.
The Bitcoin seized by the feds was directly linked to the Bitfinex hack of 2016 when the crypto exchange experienced the biggest digital asset hack in history.
According to court documents seen by the Justice Department, Lichtenstein and Morgan allegedly attempted to launder Bitcoin that was stolen from Bitfinex after a hacker breached the exchange’s systems, and then sent the stolen crypto to a wallet under Lichtenstein’s control in over 2,000 unauthorized transactions.
“Over the last five years, approximately 25,000 of those stolen bitcoin were transferred out of Lichtenstein’s wallet via a complicated money laundering process that ended with some of the stolen funds being deposited into financial accounts controlled by Lichtenstein and Morgan.
The remainder of the stolen funds, comprising more than 94,000 bitcoin, remained in the wallet used to receive and store the illegal proceeds from the hack. After the execution of court-authorized search warrants of online accounts controlled by Lichtenstein and Morgan, special agents obtained access to files within an online account controlled by Lichtenstein.”
The Department says that the files seized by the agents contained the private keys required to access the alleged money launderers’ crypto wallets and recover the BTC.
After allegedly getting ahold of the stolen Bitcoin, the feds say that Lichtenstein and Morgan used a series of complex strategies to try and obfuscate their digital paper trail, including sending the crypto to darknet markets, utilizing fake identities, and using US-based business accounts to legitimize their banking activity.
Last week, the stolen BTC was spotted moving around the blockchain in a flurry of massive transactions. Currently, it’s unclear whether that activity was related to the US government seizing the Bitcoin.
The two suspects are charged with conspiracy to commit money laundering, a crime that carries a maximum sentence of 20 years in prison, plus conspiracy to defraud the United States, which carries a maximum sentence of five years in prison.
FBI Deputy Director Paul M. Abbate warns aspiring crypto money launderers that US authorities have the ability to prevent illicit digital activity.
“Criminals always leave tracks, and today’s case is a reminder that the FBI has the tools to follow the digital trail, wherever it may lead…Thanks to the persistent and dedicated work of our FBI Investigative teams and law enforcement partners, we’re able to uncover the source of even the most sophisticated schemes and bring justice to those who try to exploit the security of our financial infrastructure.”
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