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Justice Department Seizes $3.6B From NY Couple in Crypto Case

The Justice Department announced its largest-ever financial seizure — more than $3.6 billion — and the arrests of a New York couple accused of conspiring to launder billions of dollars in cryptocurrency stolen from the 2016 hack of a virtual currency exchange, the Associated Press reports. Federal officials said the recovered sum was linked to the hack of Bitfinex, a virtual currency exchange whose systems were breached by hackers nearly six years ago. Ilya “Dutch” Lichtenstein, a 34-year-old citizen of Russia and the U.S. and his wife, Heather Morgan, 31, were arrested in Manhattan on Tuesday, accused of relying on sophisticated techniques to launder the stolen cryptocurrency and to conceal the transactions. They face charges of conspiracy to commit money laundering and to defraud the U.S. A magistrate judge ruled Lichtenstein could be released to home detention on a $5 million bond co-signed by his parents; the bond for Morgan was set at $3 million.

The couple was not charged in the Bitfinex hack itself, during which a hacker initiated more than 2,000 unauthorized bitcoin transactions that sent stolen funds to a digital wallet under Lichtenstein’s control. About $71 million in bitcoin — valued today at more than $4.5 billion — was stolen, prosecutors say. Authorities say they traced the stolen funds to more than a dozen accounts controlled by Lichtenstein, Morgan and their businesses. Court documents accuse them of relying on classic money-laundering techniques to hide their activities and the movement of money, such as setting up accounts with fictitious names and using computer programs to automate transactions. Millions of dollars were cashed out through bitcoin ATMs and used to purchase gold and non-fungible tokens as well as more mundane items like Walmart gift cards.


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