Justice Dept. seizes $3.6B in crypto

The US Justice Department reported its largest-ever seizure, roughly $3.6 billion, on Tuesday. The department also announced the arrests of a New York couple for allegedly conspiring to launder billions of dollars in crypto stolen in 2016. 

Law enforcement officials said they recovered around $3.6 billion in cryptocurrency linked to the Bitfinex hack almost six years ago. Bitfinex is a large cryptocurrency exchange, serving 52 countries around the world. 

Ilya Lichtenstein and his wife, Heather Morgan, were arrested on Tuesday morning in Manhattan. They are being accused of using extremely technical methods to launder stolen money and conceal the transactions. The official charges are conspiracy to commit money laundering and conspiracy to defraud the United States. 

They will appear before a Manhattan federal court later on Tuesday. 

“The message to criminals is clear: cryptocurrency is not a safe haven. We can and we will follow the money, no matter what form it takes,” Deputy Attorney General Lisa Monaco said in a video statement released by the Justice Department.

The initial theft was almost 120,000 Bitcoin, which at the time was around $71 million. Now the estimated worth of that haul is more than $4.5 billion. 

Investigators were able to trace the stolen fund to many different accounts controlled by Lichtenstein, Morgan and their businesses. The infamous couple had accounts on a dark web criminal marketplace known as AlphaBay. Which has since been taken apart by the Justice Department back in 2017. Lastly, they relied on traditional money laundering techniques, using fake names to move money and hide activity. 

In turn, they used Bitcoin ATMs to cash out millions of dollars or the famous cryptocurrency. They then used that money to buy gold, NFTs and gift cards. 

While Justice Department officials acknowledge the innovation in cryptocurrency, they admit that it has been coupled with laundering, ransomware and other crimes. As a result, the National Cryptocurrency Enforcement Team was formed to monitor and mitigate this criminal activity. 

“Today’s arrests, and the Department’s largest financial seizure ever, show that cryptocurrency is not a safe haven for criminals,” Monaco said. “In a futile effort to maintain digital anonymity, the defendants laundered stolen funds through a labyrinth of cryptocurrency transactions. Thanks to the meticulous work of law enforcement, the department once again showed how it can and will follow the money, no matter the form it takes.”

Author: Tyler Irvin

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