Bitfinex: FBI Arrests Couple Linked to $4.5 Billion Crypto Exchange Hack

The US Federal Bureau of Investigation (FBI) has arrested a husband and wife alleging to have conspired to launder stolen cryptocurrency from Bitfinex 2016 hack.

Since the virtual exchange was hacked in 2016, law enforcement has seized around $3.6 billion in cryptocurrency tied to the hack.

According to Deputy Attorney General Lisa Monaco, this is the Justice Department’s largest financial seizure, adding that it shows cryptocurrency is not a safe haven for criminals.

Ilya Lichtenstein, 34, and his wife Heather Morgan, 31, both of Manhattan, are scheduled to make their initial appearances in federal court Tuesday at 3:00 p.m. in the U.S. District Court for the Southern District of New York.

The case was filed in a federal court in Washington, D.C.

The pair is accused of conspiring to launder 119,754 bitcoin that was stolen, after a hacker attacked Bitfinex and initiated more than 2,0000 unauthorized transactions.

Justice Department officials said the transactions at the time were valued at $71 billion in Bitcoin, but with the rise in the currency’s value, it is now valued at over $4.5 billion.

“As the complaint alleges, the FBI and federal prosecutors were able to trace the movement of Bitcoin from this hack,” said Matthew Graves, the U.S. Attorney for the District of Columbia.

He added that the money moved through a major darknet exchange tied to a host of crimes, as well as cryptocurrency addresses tied to child sexual abuse materials.

Tuesday’s criminal complaint came more than four months after Monaco announced the department was launching a new National Cryptocurrency Enforcement Team, which is comprised of a mix of anti-money laundering and cybersecurity experts.

Cyber criminals who attack companies, municipalities and individuals with ransomware often demand payment in the form of cryptocurrency.

In one high-profile example last year, former partners and associates of the ransomware group REvil caused a widespread gas shortage on the U.S. East Coast when it used encryption software called DarkSide to launch a cyber attack on the Colonial Pipeline.

The Justice Department was later recovered some $2.3 million in cryptocurrency ransom that Colonial paid to the hackers.