Ilya Lichtenstein and Heather Morgan were arrested on Tuesday morning for an alleged conspiracy to launder cryptocurrency from the hack of Bitfinex, according to a DOJ statement.
The virtual currency exchange lost more than 120,000 bitcoin in the hack. According to Deputy Attorney General Lisa O. Monaco, the coins stolen at the time were valued at $71 million. Today, the loss is worth more than $4.5 billion.
Court records show that Lichtenstein and Morgan had made more than 2,000 unauthorized transactions on the Bitfinex platform. According to the DOJ press release, 25,000 of the stolen bitcoin were transferred from Lichtenstein’s wallet through a complex series of digital money laundering techniques to other accounts tied to the couple.
“The message to criminals is clear: cryptocurrency is not a safe haven,” said Monaco in a press briefing on Tuesday. “We can and we will follow the money no matter what form it takes.”
According to the U.S. Immigration and Customs Enforcement (ICE), numerous false identities were used to set up receiving accounts for the laundered proceeds. Computer programs to automate transactions into other virtual currency exchanges, and spending in darknet markets were both used to cover the transaction trail.
Cryptocurrency transactions are supposed to offer significant transparency as each transaction is logged into a blockchain, allowing a trail of transactions to be made available as a digital ledger. Money laundering through cryptocurrency has seen rise in “chain hopping,” converting one form of virtual currency into another. It has become a common technique to prevent a transaction trail from being traced.
“Criminals always leave tracks, and today’s case is a reminder that the FBI has the tools to follow the digital trail, wherever it may lead,” said FBI Deputy Director Paul M. Abbate.
Both Lichtenstein and Morgan are set to appear in federal court and face up to 25 years in prison. Apart from conspiracy to commit money laundering, the charges include conspiracy to defraud the United States.
