In a corner hack by one of the world’s largest crypto companies, 119,000 bitcoins were stolen from the Bitfinex exchange in Hong Kong in 2016. On Tuesday morning, nearly six years later, the Department of Justice arrested a married couple in New York, accusing them for laundering stolen cryptocurrency.
Officials seized more than 94,000 bitcoins from 34-year-old Ilya Liechtenstein and his 31-year-old wife, Heather Morgan. The Justice Department said bitcoin was valued at $ 3.6 billion, making it the largest financial seizure in history. The couple is accused of conspiracy to launder, not of actually hacking. This is a historic day for cryptocurrency and even for the Ministry of Justice.
But this is not what attracts people’s attention.
As important as the bust is, Heather Morgan has attracted a lot of interest because of her strange online past. In her LinkedIn profile, she describes herself as an economist, entrepreneur and disrespectful rapper. This led to a viral sharing of articles she wrote for Forbes, including one entitled “Experts share tips to protect your business from cybercriminals.” This article includes comments from BitGo, which provided security support for Bitfinex during the 2016 hack.
Then there are rap videos performed under the pseudonym Razzlekahn, where she calls herself “Turkish Martha Stewart” and “The Wall Street Crocodile” in various ways. Her song Versace Bedoin begins: “This song is for entrepreneurs and hackers, all inappropriate and clever lazy people.” The videos have been downloaded to YouTube but remain shared on Twitter.
However, the ability of the Ministry of Justice to track allegedly laundered bitcoins is significant. Cryptocurrencies such as bitcoin and ether are exchanged on a decentralized blockchain, allowing users to send and receive these tokens anonymously. This anonymity has attracted a criminal element, such as bitcoin and the like, and is often used as a black market currency. The justice ministry called Tuesday’s arrests evidence that blockchains were not ironclad protection against law enforcement.
“We will not allow cryptocurrency to be a safe haven for money laundering or an area of lawlessness within our financial system,” said Assistant Attorney General Kenneth Polit Jr.
The Ministry of Justice said that the Bitfinex hacker had sent 119,754 bitcoins to Liechtenstein’s digital wallet for a series of 2,000 transactions. About 25,000 bitcoins were transferred from Liechtenstein’s portfolio – today worth about $ 1 billion. Liechtenstein tried to cover up the stolen tokens, but the Justice Department said it was able to track his transactions on the blockchain. It claims that some bitcoins were used to buy gold and NFT, while others were transferred to funds that appear in the bank accounts of Lichstentein and Morgan.
The remaining 94,000 bitcoins were confiscated on Tuesday. Both Liechtenstein and Morgan face 20 years in prison on a conspiracy to commit money laundering charges, plus five years on a conspiracy to defraud the United States.
119,756 bitcoins stolen from Bitfinex are worth $ 72 million at the time the hack was made public, according to the New York Times. The news managed to reduce bitcoin by 20% to about $ 560. The price of bitcoin is now $ 43,400.