Bitcoin soars to $29,892 on false ETF approval news by Cointelegraph, triggering $180M in liquidations. Concerning financial players.
- Ilya “Dutch” Lichtenstein pleaded guilty in a Washington D.C. federal court for hacking the Bitfinex crypto exchange 2016.
- The hack, executed by Lichtenstein, was the largest of its time, involving the siphoning of more than 119,000 Bitcoins from the exchange.
Husband and Wife Plead Guilty To Money Laundering
Ilya Lichtenstein, the man behind the 2016 hack, has been charged with one count of money laundering conspiracy. If convicted, Lichtenstein could face up to 20 years in prison.
Lichtenstein’s wife, Heather Rhiannon Morgan, was also present and pleaded guilty after him. Both were involved in the hacking. Heather Rhiannon Morgan pleaded guilty to money laundering and conspiracy to defraud the United States government.
The investigation and case have been ongoing for some time. Authorities long suspected the couple of being behind the hack. The Department of Justice formally charged them on August 3, and the couple chose to plead guilty.
Lichtenstein has been in custody for more than a year without the option of a bond as the courts consider him a flight risk. On the other hand, his wife Morgan is out with a $3 million bond. While both are charged with money laundering and fraud, there are no charges for the Bitfinex hack.
94,000 Bitcoin Recovered So Far
The couple had carefully protected their identity from the hack, including masking transactions over the years to use their ill-gotten gains. They were finally arrested in February 2022. Authorities seized more than 94,000 BTC from them, a significant portion of the 119,000+ they stole.
The total Bitcoin hacked was worth roughly $4.5 billion during the arrest. This was a significant jump from the $70 million in 2016.
With only 94,000 BTC recovered, authorities were informed that the remaining 25,000 were either liquidated or sold off for physical gold coins. Lichtenstein traveled to Kazakhstan and Ukraine to find middlemen who would cash out the Bitcoin.
Lichtenstein established a software service firm (now defunct) called Endpass in the U.S. as a front for laundering the money. “Subsequently, he would deposit the money into his firm’s U.S. accounts from Ukraine or Russia. Endpass documentation would show the money coming from its sales.
$315,000 Returned to Bitfinex
Bitfinex said in July it received around $300,000 in cash and roughly 7 Bitcoin Cash of the stolen funds back, thanks to the Department of Homeland Security.
It also said this was made possible through authorities and the exchange working together.
“Bitfinex also diligently worked with the U.S. Department of Justice to identify the perpetrators of the hack, recover the stolen bitcoin, and bring the hackers to justice,” the company said. “After seven years, those efforts have come to fruition.”– Bitfinex
However, the amount received is only a small fraction of the total stolen. The Department of Justice now controls the remaining 94,000 BTC, cash, gold, and other holdings. While there’s no news about when Bitfinex will receive the remaining funds, this might occur after the trial concludes.