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The feds seized $3.6 billion in bitcoin from a 2016 hack

The stolen bitcoin was worth $72 million at the time of the hack.

Bitcoin

The stolen bitcoin was worth $72 million at the time of the hack.

Image: Protocol

The wheels of justice grind slowly, but sometimes that means a 50x return.

The Justice Department seized $3.6 billion in bitcoin that was stolen in a hack of crypto exchange Bitfinex in 2016, officials said Tuesday.

Ilya Lichtenstein and Heather Morgan, the husband and wife charged with conspiring to launder the bitcoin, were arrested in New York Tuesday. After a hacker breached Bitfinex and initiated 2,000 unauthorized transactions in August 2016, the bitcoin was sent to Lichtenstein's digital wallet. The stolen tokens were worth about $72 million at the time.

Officials said the case is the largest financial seizure in the department's history — a feat largely attributable to the enormous run-up in the price of bitcoin in the period between the initial hack and the arrests in the case. The couple allegedly stole 120,000 bitcoin, worth $4.5 billion, and the Justice Department has reclaimed $3.6 billion of that amount. Officials said 25,000 of those bitcoin were transferred from Lichtenstein's digital wallet into the couple's financial accounts over the past five years.

"Cryptocurrency is not a safe haven for criminals,” Deputy Attorney General Lisa Monaco said in a statement. “In a futile effort to maintain digital anonymity, the defendants laundered stolen funds through a labyrinth of cryptocurrency transactions."

Lichtenstein and Morgan face charges that carry a 20-year maximum prison sentence.

Nat Rubio-Licht

Nat Rubio-Licht is a Los Angeles-based news writer at Protocol. They graduated from Syracuse University with a degree in newspaper and online journalism in May 2020. Prior to joining the team, they worked at the Los Angeles Business Journal as a technology and aerospace reporter.

bitcoindojdepartment of justicebitfinexhackcryptocurrency
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Bulletins