Two New York residents arrested for alleged scheme to launder $4.5B in stolen bitcoin News
Leonhard_Niederwimmer / Pixabay
Two New York residents arrested for alleged scheme to launder $4.5B in stolen bitcoin

The Department of Justice Tuesday announced that two individuals in Manhattan were arrested for an alleged conspiracy to launder $4.5 billion in stolen cryptocurrency. The cryptocurrency was stolen during the 2016 hack of Bitfinex, a virtual currency exchange.

Ilya Lichtenstein and his wife, Heather Morgan, allegedly conspired to launder the proceeds of 119,754 bitcoin that were stolen from Bitfinex after a hacker breached the platform’s systems and initiated more than 2,000 unauthorized transactions. Those unauthorized transactions transferred the stolen bitcoin to a digital wallet under Lichtenstein’s control. Throughout the last five years, Lichtenstein and Morgan have used sophisticated laundering techniques to relocate the proceeds from their digital wallet and into financial accounts possessed by the couple.

The investigation was led by IRS-CI Washington, D.C. Field Office’s Cyber Crimes Unit, the FBI’s Chicago Field Office, and HSI-New York. According to Chief Jim Lee of IRS-Criminal Investigation (IRS-CI), “in a methodical and calculated scheme, the defendants allegedly laundered and disguised their vast fortune.” However, through intel and collaboration, the IRS-CI Cyber Crimes Unit special agents were able to trace, access, and seize the stolen funds through unraveling the laundering techniques used by Lichtenstein and Morgan. 

Lichtenstein and Morgan are charged with conspiracy to commit money laundering, which carries a maximum sentence of 20 years in prison, and conspiracy to defraud the United States, which carries a maximum sentence of five years in prison. The case is being prosecuted by Trial Attorneys Jessica Peck and C. Alden Pelker of the Justice Department’s Computer Crime and Intellectual Property Section and Assistant U.S. Attorney Christopher B. Brown of the U.S. Attorney’s Office for the District of Columbia.

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