The U.S. Department of Justice (DoJ) has seized more than 94,000 Bitcoins worth 3.6 billion dollars that were allegedly stolen in the hack of crypto exchange Bitfinex in 2016. Many see this as a testament to how difficult the laundering of significant sums is through a transparent public blockchain.
According to an announcement by the DoJ, 34-year-old Ilya Lichtenstein, and his wife Heather Morgan, 31, were arrested for alleged conspiracy to launder $4.5 billion in stolen cryptocurrency. The report noted that law enforcement has seized over $3.6 billion in cryptocurrency linked to that hack so far. The couple faces up to 25 years in prison if convicted, and they are set to make an initial appearance in federal court in Manhattan this week.
Couple uses different laundering techniques
The couple used several laundering techniques including using fabricated identities, fake online accounts, automated transactions, “chain hopping” by converting to privacy-focused coins and many more. On-chain analyst David Pull delved into the wallet activity and movements of the digital loot concluding:
Fin/ This is just one example of how Bitcoin's public ledger, open to all, allows for observants the see the history of the ledger unfolding live.
— David Puell (@kenoshaking) February 8, 2022
The Bitfinex hack was one of the largest in crypto history with 119,754 BTC - 0.5% of the total supply - worth around $4.5 billion at current prices stolen five years ago. This conclusion of the incident once again shows how difficult it is to launder money through a fully transparent distributed ledger such as Bitcoin.
Who do the coins belong to?
Some commentators on social media expressed concern over the amount of Bitcoin that the U.S. government now controls. BitcoinTreasuries, which tracks corporate and fund holdings of BTC, stated that it was adding the U.S. government to its listings with $4.5 billion worth of the asset. Authorities have yet to seize the full amount, however, but the current haul would be equivalent to more than double what Tesla holds.
The U.S. government does not own that BTC, however, and it should rightfully be returned to Bitfinex who promised to return it to the victims of the hack. The exchange made a statement on the same day to that effect:
"We are pleased that the U.S. Department of Justice has today announced that it has recovered a significant portion of the bitcoin stolen during the August 2016 security breach. We have been cooperating extensively with the DOJ since its investigation began and will continue to do so. Bitfinex will work with the DOJ and follow appropriate legal processes to establish our rights to a return of the stolen bitcoin." - Statement Bitfinex
