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DOJ Arrests Couple and Seizes $3.6B of stolen cryptoassets from a 2016 hack
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If y’all’re trying to launder funds,
maybe don’t put all the incriminating evidence in the cloud.
Ii individuals were arrested this morning in Manhattan for an alleged conspiracy to launder cryptocurrency that was stolen during the 2016 hack of Bitfinex, a virtual currency substitution, soon valued at approximately $4.five billion.
Thus far, police force enforcement has seized over $three.6 billion in cryptocurrency linked to that hack.
“Today’s arrests, and the
department’south largest financial seizure ever, bear witness that cryptocurrency is not a safe haven for criminals,” said Deputy Attorney Full general Lisa O. Monaco. “In a futile try to maintain digital anonymity, the defendants laundered stolen funds through a labyrinth of cryptocurrency transactions. Thanks to the meticulous work of law enforcement, the section once again showed how information technology can and volition follow the coin, no matter what form information technology takes.”
Ilya Lichtenstein, 34, and his wife, Heather Morgan, 31, both of New York, New York, are scheduled to make their initial appearances in federal courtroom today at 3:00 p.m. in Manhattan.
After the execution of court-authorized search warrants of online accounts controlled past Lichtenstein and Morgan, special agents obtained access to files within an online account controlled by Lichtenstein. Those files independent the individual keys required to access the digital wallet that straight received the funds stolen from Bitfinex, and allowed special agents to lawfully seize and recover more than 94,000 bitcoin that had been stolen from Bitfinex. The recovered bitcoin was valued at over $three.6 billion at the time of seizure.
The criminal complaint alleges that Lichtenstein and Morgan employed numerous sophisticated laundering techniques, including using fictitious identities to set upward online accounts; utilizing reckoner programs to automate transactions, a laundering technique that allows for many transactions to have identify in a short period of time; depositing the stolen funds into accounts at a variety of virtual currency exchanges and darknet markets and then withdrawing the funds, which obfuscates the trail of the transaction history by breaking up the fund catamenia; converting bitcoin to other forms of virtual currency, including anonymity-enhanced virtual currency (AEC), in a practise known as “chain hopping”; and using U.Southward.-based business concern accounts to legitimize their banking activity.
From the argument of facts attached to the press release:
At the time of the alienation, 119,754 BTC was valued at approximately
$71 million. Due to the increase in the value of BTC since the alienation, the stolen funds are valued at over
as of February 2022.
On January 31, 2022, law enforcement gained access to Wallet 1CGA4s by decrypting a file saved to LICHTENSTEIN’s cloud storage account, which had been obtained pursuant to a search warrant.
The file independent a listing of 2,000 virtual currency addresses, forth with corresponding private keys.
Blockchain assay confirmed that almost all of those addresses were directly linked to the hack.
Lichtenstein Electronic mail 2 was held at a U.S.-based provider that offered email likewise as cloud storage services, amongst other products. In 2021, agents obtained a copy of the contents of the cloud storage account pursuant to a search warrant. Upon reviewing the contents of the account, agents confirmed that the business relationship was used by LICHTENSTEIN.
Nevertheless, a significant portion of the files were encrypted.
On or about Jan 31, 2022,
constabulary enforcement was able to decrypt several cardinal files
contained inside the account. Most notably, the account contained a file listing all of the addresses within Wallet 1CGA4s and their respective private keys. Using this information, law enforcement seized the remaining contents of the wallet, totaling approximately 94,636 BTC, presently worth $three.629 billion, as described above.
LICHTENSTEIN’s cloud storage account also independent the
account spreadsheet, discussed in the preceding subsections, detailing the log-in information and condition of accounts at numerous VCEs, including a notation of which accounts had been frozen or emptied. Every bit explained to a higher place, many of these accounts received stolen funds from Victim VCE.
Furthermore, LICHTENSTEIN’s cloud storage account likewise contained a folder named “personas.” The “personas” binder contained biographical information and identification documents for numerous individuals. The business relationship also included a text file named “passport_ideas” that included links to different darknet vendor accounts that appeared to be offering passports or identification cards for sale.
LICHTENSTEIN’south cloud storage business relationship contained a binder holding data files for numerous fiscal institutions with notes that announced to be reconnaissance of potential laundering avenues. For case, a certificate for Alfa-Bank describes the banking company as a “sketchy Russian oligarch bank” and includes notes virtually log-in procedures.
There’s a agglomeration of other info in the statement of facts, well-nigh how funds from the hack were transferred to
verified personal accounts
owned by Lichtenstein and Morgan and their “companies”. It looks to be about equally close to an open-and-shut case every bit you can get with these things.
When hackers made off with approximately 120,000 bitcoin from the Bitfinex currency exchange in 2016, information technology was worth around $71 million. With the wild upswing in the value of the cryptocurrency, it would now be worth around $4.5 billion.
That presented serious problems for the couple, who take allegedly struggled for the by 5 years to launder the ever-increasing pile of money, prosecutors said.
The pair had appeared to have managed to launder just about 20% of it, according to court papers. Investigators say they seized virtually 90,000 bitcoin worth effectually $3.half dozen billion concluding week from virtual wallets controlled by the couple.
“Every bit the value of the money grew, this likely became a far more complex scheme than they believed they were getting into when it started,” said attorney Rachel Fiset, of Zweiback, Fiset and Coleman, who specializes in complex financial fraud cases. “It was going to take hold of up to them at some signal because the pot just kept growing.
Y’all can’t just agree a few billion dollars for 5 years unnoticed.”
Morgan has instantly become a character following news of the hack today, as people have been combing through her social media and LinkedIn and discovering her… unique persona. The DOJ’s criminal complaint lists an alias of hers as “Razzlekhan,” and people were quick to discover the rap songs she released under that proper noun. The music video for one of the songs is titled “Rap Anthem for Misfits & Weirdos: Versace Bedouin Music Video,” and Razzlekhan shouts out “entrepreneurs and hackers” in the lyrics.
Since the hack, the crypto industry has kept a close heart on the stolen coins’ move. Crypto compliance business firm Elliptic has a bang-up deep-dive from 2021, which covers how hundreds of thousands of dollars worth of Bitcoin were shuffled effectually, though, at the fourth dimension, information technology was unknown who controlled the wallet. The government alleges that Lichtenstein and Morgan’s laundering involved several other crypto exchanges and
gift cards for Walmart, Uber, Hotels.com, and PlayStation. The statement of facts likewise accuses the couple of lying to exchanges almost how they got the Bitcoin and what they were doing with it.
That rap video reminds of another one that I would rather not delve into due to the cringe.
And of fucking course they call themselves “entrepreneurs.”
my vag itch
Forbes writer too? Damn.
Is Sometimes A Practiced Bean
At outset glance, his face looked like Elijah Wood lmao
“Today’s arrests, and the
department’southward largest financial seizure always, show that cryptocurrency is not a safe haven for criminals,” said Deputy Attorney General Lisa O. Monaco. “In a futile effort to maintain digital anonymity, the defendants laundered stolen funds through a labyrinth of cryptocurrency transactions. Thank you to the meticulous piece of work of police enforcement, the department once over again showed how it can and will follow the money, no thing what grade it takes.”
The mistaken belief that crypto is somehow perfectly seamlessly and effortlessly anonymous past default is one of police enforcements absolute all-time handicaps. I wouldn’t even denote this stuff. I would just let the general public keep believing that merely having crypto and moving it through some regular ass wallets makes it magically untraceable.
You are then much improve off doing dirt with cash hand to manus or in a fucking briefcase in 99% of cases than trying to do this shit on a public ledger.
Heather R. Morgan is an international economist, serial entrepreneur, and investor in B2B software companies. She is an expert in persuasion, social engineering, and game theory. Morgan is the co-founder and CEO of Endpass, which uses Artificial Intelligence (AI) to automate identity verification while proactively detecting fraud.
When she’due south not contrary-engineering blackness markets to remember of amend ways to gainsay fraud and cybercrime, she enjoys rapping and designing streetwear mode.
When you lot gainsay cybercrime so hard you start committing it.
To Infinity and Beyond Alkali
and how to protect yourself from the darker sides of net fame.
If you call back about it, stealing multiple billion dollars might actually be the most gangster thing any rapper has ever done.
request for a friend
I mean yeah, merely it’south still possible to liquidate it, just slowly. Anyone trying to launder that kind of coin through “sketchy Russian oligarch banks” gets at least a few gangster points in my volume
That rap video reminds of some other one that I would rather not delve into due to the blench.
And of fucking grade they telephone call themselves “entrepreneurs.”
I’chiliad surprised she didn’t call herself an “entrapeneur” tbh
Nearly as much as the
I’m not sure Genghis Khan needed more “pizzazz”
So many non extradition countries and you lot alive downwardly the street from the second biggest fed offices?
Mayhap they took the term “Keep your friends close and your enemies closer” toooo literally.
So many non extradition countries and you live down the street from the 2nd biggest fed offices?
Just because yous tin can steal money doesn’t mean you’re smart.
I’m not sure Genghis Khan needed more than “pizzazz”
“Could exist” lol fuck off. The amount of narcissism that people are capable of, jesus christ.
To Infinity and Beyond Alkali
So much golden on that channel lol
To Infinity and Beyond Alkali
As less Bernie Madoff ran people’southward pockets while looking them dead in the centre
please tell me these were to two trust fund babies?
Its a white daughter from Manhattan who sings wannabe glam rap, what do you lot think?
Y’all ever see a video that you know is cursed only from the thumbnail?
You ever come across a video that y’all know is cursed just from the thumbnail?
This might be the almost Honky-ass hymeneals I’ve ever seen, from the music choice to the cultural appropriation…