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The U.S. Department of Justice arrested a couple on Tuesday morning for allegedly attempting to launder billions in cryptocurrency that was stolen during a 2016 hack of the virtual currency exchange Bitfinex.
Ilya Lichtenstein, 34, and his wife, Heather Morgan, 31, both of New York City, were arrested in Manhattan and are accused of attempting to launder the stolen cryptocurrency, currently valued at around $4.5 billion, according to a DOJ press release. The couple has been charged with conspiracy to commit money laundering and conspiracy to defraud the U.S.
Court documents indicate that Lichtenstein and Morgan, who are set to appear in federal court on Tuesday, allegedly conspired to launder the proceeds of 119,754 bitcoins stolen from Bitfinex's platform after a hacker initiated over 2,000 unauthorized transactions. Law enforcement has seized over $3.6 billion related to that hack, the DOJ added, as part of the department's largest-ever financial seizure.
"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 O. Monaco was quoted in the DOJ release.
Court records show that the stolen bitcoins were in a digital wallet allegedly controlled by Lichtenstein, the DOJ said, adding that around 25,000 bitcoins were transferred out of the wallet over the past five years through a complex money laundering process. Some of that money was deposited into accounts that authorities say were controlled by Lichtenstein and Morgan.
Police have seized the remaining stolen bitcoins in the wallet, which totaled over 96,000 and were valued at over $3.6 billion at the time of the seizure, the DOJ said.
Officials have said that at the time of the alleged theft, the total amount was valued at $71 million, according to the Associated Press.
Lichtenstein and Morgan allegedly used techniques including setting up online accounts with fake names, using computer programs to automate transactions, converting bitcoin into other virtual currencies and legitimizing their banking activity through the use of U.S.-based accounts, the DOJ added.
"Cryptocurrency and the virtual currency exchanges trading in it comprise an expanding part of the U.S. financial system, but digital currency heists executed through complex money laundering schemes could undermine confidence in cryptocurrency," said U.S. Attorney Matthew M. Graves for the District of Columbia. "The Department of Justice and our office stand ready to confront these threats by using 21st-century investigative techniques to recover the stolen funds and to hold the perpetrators accountable."
Update 02/08/2022 at 2:55 PM: This story was updated to add information from the Department of Justice and the Associated Press, as well as comments from U.S. Attorney Matthew M. Graves, and to update the headline.
