Justice Office seizes $3.6B in bitcoin in its most important finance bust ever

The US Justice Department seized on Tuesday $3.6 billion in bitcoin that it states is linked to the 2016 hack of the Hong Kong cryptocurrency trade Bitfinex, which was just one of the world’s major crypto firms. Authorities also arrested two persons in Manhattan, charging them with conspiracy to launder cryptocurrency stolen for the duration of the hack. The bitcoin total taken in the hack is presently valued at $4.5 billion.

Officials seized around 94,000 bitcoin from Ilya Lichtenstein, 34, and his spouse, Heather Morgan, 31. The DOJ explained that the seized bitcoin are valued at $3.6 billion, producing this the premier economic seizure in the department’s history. The seizure reveals that law enforcement can observe cash by way of the blockchain, the DOJ claimed.   

“We will not let cryptocurrency to be a safe and sound haven for income laundering or a zone of lawlessness in our fiscal system,” Kenneth Well mannered Jr., assistant attorney basic for the DOJ’s prison division, mentioned in a assertion.

As momentous as the bust is, Morgan has garnered a substantial quantity of fascination because of her odd on the net previous. On her LinkedIn profile, she describes herself as an economist, entrepreneur and irreverent rapper. That’s led to viral sharing of content she’s composed for the likes of Forbes, which includes 1 titled: “Gurus share ideas to shield your business enterprise from cybercriminals.” That article incorporates reviews from BitGo, which offered security support for Bitfinex at the time of the 2016 hack.

Then there are the rap video clips, executed under the alias Razzlekhan, whereby she variously calls herself the “Turkish Martha Stewart” and “The Crocodile of Wall Avenue.” Her song Versace Bedouin commences: “This song is for the entrepreneurs and hackers, all the misfits and sensible slackers.” The films have been taken down on YouTube, but continue to be shared on Twitter.

If I have to suffer by means of this, so do you.

Heather Morgan — the girl arrested on suspicion of laundering crypto joined to the Bitfinex hack — is also an novice rapper. pic.twitter.com/qAK9WUfZCy

— Connor Sephton (@ConnorSephton) February 8, 2022

This “rapper” with an alias of RAZZLEKHAN aka Heather Morgan was billed now in NYC, with getting section of funds laundering scheme that associated Billions worthy of of Bitcoin.

I think she must have now been in jail for existence for whatsoever this is. pic.twitter.com/CwHVH4kf7y

— Allowing Go (@ProvideContext) February 8, 2022

The Justice Department’s means to keep track of the allegedly laundered bitcoin is substantial. Cryptocurrencies like bitcoin and ether are exchanged on decentralized blockchains, which allow individuals to ship and receive the tokens with anonymity. That anonymity has captivated criminals, with bitcoin and the like frequently remaining applied as black sector currency. 

Cryptocurrency use in criminal offense totaled about $14 billion in transfers to illicit addresses final calendar year, in accordance to a January report from Chainalysis. Nevertheless, crime accounted for considerably less than 1% of cryptocurrency transactions very last year.   

The DOJ said, citing courtroom documents, that the Bitfinex hacker despatched 119,754 bitcoin to Lichtenstein’s electronic wallet by way of a sequence of 2,000 transactions. All-around 25,000 bitcoin — today value about $1 billion — were being transferred out of his wallet. Lichtenstein allegedly tried to disguise these stolen tokens, but the DOJ mentioned it was able to adhere to his transactions on the blockchain. The section alleges that some bitcoin ended up made use of to obtain gold and NFTs, when other people were being translated into resources that appeared in Lichtenstein and Morgan’s bank accounts. 

The remaining 94,000 bitcoin are what was seized Tuesday. If convicted, both Lichtenstein and Morgan could experience up to 20 years in jail for conspiracy to commit income laundering, in addition five many years for conspiracy to defraud the United States.