The DOJ’s $3.6B Bitcoin Seizure Shows How Hard It Is to Launder Crypto
54 years, 11 months ago

The DOJ’s $3.6B Bitcoin Seizure Shows How Hard It Is to Launder Crypto

Wired  

On Tuesday, Ilya Lichtenstein and Heather Morgan were arrested in New York and accused of laundering a record $4.5 billion worth of stolen cryptocurrency. Redbord points to the couple's alleged use of "chain-hopping"— transferring funds from one cryptocurrency to another to make them more difficult to follow—including exchanging bitcoins for "privacy coins" like monero and dash, both designed to foil blockchain analysis. In a 20-page "statement of facts" published alongside the Justice Department's criminal complaint against Lichtenstein and Morgan on Tuesday, IRS-CI detailed the winding and tangled routes the couple allegedly took to launder a portion of the nearly 120,000 bitcoins stolen from the cryptocurrency exchange Bitfinex in 2016. “What was amazing about this case is the laundry list of obfuscation techniques.” Ari Redbord, TRM Labs But to get to the point of identifying Lichstenstein—along with his wife, Morgan—and locating that cloud account, IRS-CI followed two branching paths taken by 25,000 bitcoins that moved from the 1CGa4s wallet across Bitcoin's blockchain. Lichtenstein and Morgan appear to have intended to use Alphabay as a "mixer" or "tumbler," a cryptocurrency service that takes in a user's coins and returns different ones to prevent blockchain tracing.

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History of this topic

Crypto hacker who stole $11 billion of bitcoin sentenced to prison
1 month, 1 week ago

Crypto hacker who stole $11 billion of bitcoin sentenced to prison

The Independent  

Sign up to our free weekly IndyTech newsletter delivered straight to your inbox Sign up to our free IndyTech newsletter Sign up to our free IndyTech newsletter SIGN UP I would like to be emailed about offers, events and updates from The Independent. Read our privacy policy A hacker has been sentenced to five years in prison for stealing and …

'Bitcoin’s biggest heist': How did Ilya Lichtenstein pull off the $10 billion cyber theft?
1 month, 1 week ago

'Bitcoin’s biggest heist': How did Ilya Lichtenstein pull off the $10 billion cyber theft?

Firstpost  

Ilya Lichtenstein and his wife, Heather Morgan, executed one of the ‘largest Bitcoin thefts’ in history, draining 120,000 bitcoins from Bitfinex in 2016. Lichtenstein’s wife, Heather Morgan, also known by her rap alias “Razzlekhan,” initially unaware of the hack, later became a crucial accomplice. Prosecutors noted, “Over half a decade, the defendant engaged in what IRS agents described as the …

Man who stole and laundered roughly $1B in bitcoin is sentenced to 5 years in prison
1 month, 1 week ago

Man who stole and laundered roughly $1B in bitcoin is sentenced to 5 years in prison

Associated Press  

WASHINGTON — A computer expert who stole bitcoin worth billions of dollars at current prices — and then spent years laundering some of the hacked cryptocurrency with help from his wife — was sentenced on Thursday to five years in prison. Ilya Lichtenstein masterminded one of the largest-ever thefts from a virtual currency exchange before he and his wife, Heather …

69,000 Bitcoins Are Headed for the US Treasury—While the Agent Who Seized Them Is in Jail
54 years, 11 months ago

69,000 Bitcoins Are Headed for the US Treasury—While the Agent Who Seized Them Is in Jail

Wired  

In November of 2020, a person identified by the US Department of Justice only as “Individual X” sat down with an IRS agent named Tigran Gambaryan and prosecutors at the US Attorney’s office in San Francisco. Over the four years that it has taken the US government to establish legal ownership of that massive sum of bitcoins—identified by the IRS …

Billions of dollars of stolen cryptocurrencies laundered using cross-chain tools
2 years, 2 months ago

Billions of dollars of stolen cryptocurrencies laundered using cross-chain tools

The Hindu  

Illicit actors, who are masters at using blockchain protocols and platforms, have moved stolen crypto funds between multiple blockchains, leaving law enforcement agencies struggling to follow their money trail. The inter-connected nature of blockchains has resulted in cyber criminals finding more complex ways to launder money and hide their tracks, according to a report by U.K. based blockchain analysis firm …

Former cop accused of handling €4.2 million in money laundering scheme
2 years, 5 months ago

Former cop accused of handling €4.2 million in money laundering scheme

NL Times  

A former police officer was arrested on Tuesday morning on suspicion of offering underground financial services, and laundering about 4.2 million euros within a period of a year. A joint investigation by the police and the financial crimes inspectorate, FIOD, involved decrypted private communication, which pointed authorities towards the suspect. ”Phone calls also revealed that the man is involved in …

Stolen Bitcoin, fake personas and a trip to Ukraine: Inside the case against crypto heist couple Heather Morgan and Ilya Lichtenstein
2 years, 9 months ago

Stolen Bitcoin, fake personas and a trip to Ukraine: Inside the case against crypto heist couple Heather Morgan and Ilya Lichtenstein

ABC  

In January 2021, the US Department of Justice was closing in on its biggest financial bust ever: the seizure of more than $US3.6 billion in cryptocurrency. While the the trial date has not yet been set, it looks set to deliver on drama, with prosecutors alleging Lichtenstein and Morgan's activities "appear pulled from the pages of a spy novel". Prosecutors …

Justice Dept. announces $3.6B crypto seizure, 2 arrests
2 years, 10 months ago

Justice Dept. announces $3.6B crypto seizure, 2 arrests

Associated Press  

WASHINGTON — The Justice Department announced Tuesday its largest-ever financial seizure — more than $3.6 billion — and the arrests of a New York couple accused of conspiring to launder billions of dollars in cryptocurrency stolen from the 2016 hack of a virtual currency exchange. We can and we will follow the money, no matter what form it takes,” Deputy …

Couple accused of laundering $5 billion in hacked bitcoin, which was only worth $100 million when it was stolen
2 years, 10 months ago

Couple accused of laundering $5 billion in hacked bitcoin, which was only worth $100 million when it was stolen

ABC  

A couple in New York faces charges of conspiring to launder billions of dollars in cryptocurrency stolen from a 2016 hack of a virtual currency exchange. Key points: The couple are not being charged in the hacking of the bitcoin Much of the laundering occurred through accounts on a dark web site since shut down The laundered bitcoin was used …

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