Individual charged with money laundering admits to hacking Bitfinex in 2016: Report

Thursday, 3 Aug 2023

Cointelegraph By Turner Wright

Original Article

The identity of the hacker or hackers behind an exploit that removed more than 100,000 Bitcoin from Bitfinex in 2016 had only been the subject of speculation until Aug. 3.


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One-half of the couple alleged to have laundered billions of dollars worth of cryptocurrency has reportedly admitted he was behind the 2016 Bitfinex hack.

According to an Aug. 3 CNBC report, Ilya Lichtenstein told a U.S. court he was the individual behind an exploit of cryptocurrency exchange Bitfinex in 2016 which resulted in the theft of roughly 119,754 Bitcoin (BTC). Lichtenstein spoke as part of a plea agreement with prosecutors, who charged him and his wife Heather Morgan with money laundering conspiracy and conspiracy to defraud the United States.

“During [Ilya] Lichtenstein’s plea hearing, it was revealed that he had converted some assets to gold coins, and that [Heather] Morgan had buried gold coins at a location now known to law enforcement officials.”

— David Gura (@davidgura)

August 3, 2023

At the time of publication, it was unclear whether Morgan played any role in the Bitfinex hack. She was scheduled to appear before a judge on Aug. 3 following Lichtenstein’s hearing as part of the same plea agreement in the money laundering case.

Authorities arrested Lichtenstein and Morgan in February 2022, seizing any crypto found under their control. The two allegedly laundered more than 94,643 BTC of crypto from the Bitfinex hack — worth roughly $54 million at the time but $2.7 billion at the time of publication.

Lichtenstein reportedly converted some of the assets to gold coins, with Morgan burying them in an unsuccessful effort to hide them from authorities. In addition, the Bitfinex hacker traveled to Ukraine and Kazakhstan to convert some of the crypto under his control to cash, which was then mailed to Russia and Ukraine, picked up, and deposited in U.S. bank accounts.

Related: Bitcoin bull run next? Bitfinex stablecoin ratio ‘blows up’ in 2023

At the time of their arrest, Lichtenstein and Morgan held the largest amount of assets seized by the U.S. Department of Justice. Individuals have periodically moved small amounts of BTC connected to the hack, but only a small amount has been returned to Bitfinex from authorities in an effort to restore victims’ funds.

In February 2022, Netflix ordered a documentary series about the exploits of Lichtenstein and Morgan. The streaming service has been responsible for a documentary on Gerald Cotten, the founder of defunct crypto exchange QuadrigaCX.

Magazine: Deposit risk: What do crypto exchanges really do with your money?


Cointelegraph By Turner Wright

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