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

The US Justice Section seized on Tuesday $3.6 billion in bitcoin that it suggests is linked to the 2016 hack of the Hong Kong cryptocurrency exchange Bitfinex, which was one particular of the world’s most important crypto companies. Authorities also arrested two persons in Manhattan, charging them with conspiracy to launder cryptocurrency stolen in the course of the hack. The bitcoin full taken in the hack is at this time valued at $4.5 billion.

Officers seized over 94,000 bitcoin from Ilya Lichtenstein, 34, and his wife, Heather Morgan, 31. The DOJ claimed that the seized bitcoin are valued at $3.6 billion, earning this the largest financial seizure in the department’s history. The seizure displays that regulation enforcement can stick to revenue via the blockchain, the DOJ claimed.   

“We will not permit cryptocurrency to be a safe and sound haven for funds laundering or a zone of lawlessness in just our economic procedure,” Kenneth Well mannered Jr., assistant legal professional normal for the DOJ’s prison division, claimed in a statement.

As momentous as the bust is, Morgan has garnered a big amount of desire due to the fact of her odd on-line past. On her LinkedIn profile, she describes herself as an economist, entrepreneur and irreverent rapper. Which is led to viral sharing of articles she’s written for the likes of Forbes, which includes just one titled: “Experts share guidelines to protect your business from cybercriminals.” That article contains feedback from BitGo, which supplied stability guidance for Bitfinex at the time of the 2016 hack.

Then there are the rap films, done under the alias Razzlekhan, wherein she variously calls herself the “Turkish Martha Stewart” and “The Crocodile of Wall Street.” Her tune Versace Bedouin commences: “This music is for the business people and hackers, all the misfits and clever slackers.” The video clips have been taken down on YouTube, but continue to be shared on Twitter.

If I have to undergo by way of this, so do you.

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

— Connor Sephton (@ConnorSephton) February 8, 2022

This “rapper” with an alias of RAZZLEKHAN aka Heather Morgan was charged today in NYC, with being part of revenue laundering plan that associated Billions really worth of Bitcoin.

I believe she should have now been in prison for everyday living for whatsoever this is. pic.twitter.com/CwHVH4kf7y

— Letting Go (@ProvideContext) February 8, 2022

The Justice Department’s capability to monitor the allegedly laundered bitcoin is substantial. Cryptocurrencies like bitcoin and ether are exchanged on decentralized blockchains, which permit people today to send and receive the tokens with anonymity. That anonymity has attracted criminals, with bitcoin and the like usually remaining made use of as black marketplace currency. 

Cryptocurrency use in criminal offense totaled about $14 billion in transfers to illicit addresses final yr, in accordance to a January report from Chainalysis. Having said that, crime accounted for less than 1% of cryptocurrency transactions previous calendar year.   

The DOJ stated, citing court docket files, that the Bitfinex hacker despatched 119,754 bitcoin to Lichtenstein’s electronic wallet through a collection of 2,000 transactions. All around 25,000 bitcoin — now well worth about $1 billion — have been transferred out of his wallet. Lichtenstein allegedly attempted to disguise these stolen tokens, but the DOJ stated it was able to abide by his transactions on the blockchain. The division alleges that some bitcoin have been employed to obtain gold and NFTs, while some others had been translated into resources that appeared in Lichtenstein and Morgan’s financial institution accounts. 

The remaining 94,000 bitcoin are what was seized Tuesday. If convicted, both Lichtenstein and Morgan could face up to 20 decades in jail for conspiracy to dedicate revenue laundering, plus 5 yrs for conspiracy to defraud the United States.