US government seizes $3.6 billion in bitcoin tied to 2016 hack of crypto exchange Bitfinex:
Two individuals, Ilya Lichtenstein and Heather Morgan, were arrested in New York and are expected to appear in court Tuesday afternoon. The two are charged with conspiracy to commit money laundering and conspiracy to defraud the United States. They face as many as 25 years in prison if convicted.
The DOJ detailed the seizure operation in a press release, explaining:
"According to court documents, Lichtenstein and Morgan allegedly conspired to launder the proceeds of 119,754 bitcoin that were stolen from Bitfinex's platform after a hacker breached Bitfinex's systems and initiated more than 2,000 unauthorized transactions. Those unauthorized transactions sent the stolen bitcoin to a digital wallet under Lichtenstein's control. Over the last five years, approximately 25,000 of those stolen bitcoin were transferred out of Lichtenstein's wallet via a complicated money laundering process that ended with some of the stolen funds being deposited into financial accounts controlled by Lichtenstein and Morgan. The remainder of the stolen funds, comprising more than 94,000 bitcoin, remained in the wallet used to receive and store the illegal proceeds from the hack."
"After the execution of court-authorized search warrants of online accounts controlled by Lichtenstein and Morgan, special agents obtained access to files within an online account controlled by Lichtenstein. Those files contained the private keys required to access the digital wallet that directly received the funds stolen from Bitfinex, and allowed special agents to lawfully seize and recover more than 94,000 bitcoin that had been stolen from Bitfinex. The recovered bitcoin was valued at over $3.6 billion at the time of seizure."
Notably, the amount seized corresponds to a series of transactions of Bitfinex hack-tied BTC on February 1. According to a statement of facts issued by the Department of Justice, investigators gained access to the wallets on January 31, meaning the February 1 transactions took place one day later.
Related Stories
When Canadian developer Peter Todd found out that a new HBO documentary, Money Electric: The Bitcoin Mystery, was set to identify him as Satoshi Nakamoto, the creator of Bitcoin, he was mostly just pissed. "This was clearly going to be a circus," Todd told WIRED in an email.
[...]
The mystery has proved all the more irresistible for the trove of bitcoin Satoshi is widely believed to have controlled, suspected to be worth many billions of dollars today. When the documentary was released on October 8, Todd joined a long line of alleged Satoshis.
[...]
Since the documentary aired, Todd has repeatedly and categorically denied that he created Bitcoin: "For the record, I am not Satoshi," he alleges. "I think Cullen made the Satoshi accusation for marketing. He needed a way to get attention for his film."
[...]
The search for the creator of Bitcoin has dragged into its orbit a colorful cast of characters, among them Hal Finney, recipient of the first ever bitcoin transaction; Adam Back, designer of a precursor technology cited in the Bitcoin white paper; and cryptographer Nick Szabo, to name just a few. Journalists at Newsweek, The New York Times, and WIRED, among others, have all taken stabs at solving the Satoshi riddle. But irrefutable proof has never been unearthed.
[...]
The case for Sassaman was first outlined in 2021 by Evan Hatch, founder of crypto gaming platform Worlds. Whenever speculation about Sassaman bubbles periodically to the surface, the spotlight is thrown on his widow, software developer Meredith Patterson, who believes the theory is unfounded."People used to be really fucking nosy and entitled. I'd get people writing me with a two-page list of dates and locations, asking where I was at such and such a time or place," says Patterson. "Where do you get off? A complete stranger walking up to a widow and trying to interrogate her. It's like, fuck off Sergeant Joe Friday."
[...]
"I was relieved for myself and my family that they named Peter Todd," says Patterson. "But I feel sorry for Peter Todd. Frankly, nobody deserves getting a target painted on their back."
[...]
Todd expects that "continued harassment by crazy people" will become the indefinite status quo. But he says the potential personal safety implications are his chief concern—and the reason he has gone into hiding.
[...]
Hoback sees things very differently. Though there have been cases where violent extortionists have targeted crypto holders, plenty of people have been unmasked as Satoshi before—and nothing terrible is known to have happened to them, he argues. "I think the idea that it puts their life [at risk] is a little overblown," says Hoback.
(Score: 1, Touché) by Anonymous Coward on Thursday February 10 2022, @07:17PM (3 children)
This "$3.6 bilion" in bitcoin... was that street value, or wholesale?
(Score: 3, Insightful) by Thexalon on Thursday February 10 2022, @07:20PM (2 children)
A bit under 120,000 Bitcoins. 1 Bitcoin sells for approximately $45,000. Multiply those together, you get $5.4 billion. So if anything, the $3.6 billion valuation was low.
Of course, that assumes that actually selling off all your Bitcoin doesn't affect the price of Bitcoins, which is unlikely.
"Think of how stupid the average person is. Then realize half of 'em are stupider than that." - George Carlin
(Score: 0) by Anonymous Coward on Thursday February 10 2022, @07:28PM (1 child)
You must be too young to remember the War on Drugs, when police would proudly show off an kilo of marijuana they'd eized and claim it had a "street value" of $250,000.
(Score: 0) by Anonymous Coward on Thursday February 10 2022, @08:50PM
actually the value would be infinite if pollinated and harvested late :D
(Score: 2) by bradley13 on Thursday February 10 2022, @07:32PM (3 children)
First, note that the value was much, much lower when this case started. Millions, not billions. Then: the accused may not have been brilliant, but they weren't idiots either. Funds they wanted to use went through mixers, and other wallets, before being cashed out.
This means that the feds invested a *lot* of resources in this case. One wonders why. Resources are limited, the original value here wasn't that high, crypto hacks happen all the time. Why did they choose this case to throw resources at?
Everyone is somebody else's weirdo.
(Score: -1, Offtopic) by Anonymous Coward on Thursday February 10 2022, @07:38PM
Because Pelosi told them Bitcoin would be hot by 2022 and they should get in early.
(Score: 1, Insightful) by Anonymous Coward on Thursday February 10 2022, @08:03PM
I would suggest the answer is "why not?" If they have a group dedicated to these kind of things (Cyber Squad?), why wouldn't they go after this one? Like any other crime, maybe they received some info or a direct tip that made it easier to go after this, or maybe it turned up while investigating something else. I don't think the uninteresting reasons would be that far from the truth here.
(Score: 5, Insightful) by Thexalon on Thursday February 10 2022, @09:35PM
Umm, because, as you stated, it was a multi-million dollar robbery? That seems like it would be worth some investigative time, at least as worthwhile as trying to track down pot dealers.
I mean, what would you expect law enforcement to do if a Rembrandt was stolen, just say "ho hum, things happen"?
"Think of how stupid the average person is. Then realize half of 'em are stupider than that." - George Carlin
(Score: 3, Interesting) by corey on Thursday February 10 2022, @08:59PM (2 children)
Isn’t crypto supposed to be secure, anonymous, untraceable? So many hacks lately, and the Fed’s can just walk in and identify whose accounts are whose then take over such accounts?
(Score: 2, Insightful) by Anonymous Coward on Thursday February 10 2022, @09:09PM
I don't know why people think this. Bitcoin is a *public* ledger. By definition every transfer is trackable.
(Score: 5, Informative) by Freeman on Thursday February 10 2022, @09:14PM
Bitcoin is 100% traceable, it's how it works. It's just that your personally identifiable information isn't necessarily tied to your bitcoin account. Which makes bitcoin potentially anonymous. Not untraceable.
Joshua 1:9 "Be strong and of a good courage; be not afraid, neither be thou dismayed: for the Lord thy God is with thee"
(Score: 4, Interesting) by crafoo on Thursday February 10 2022, @09:39PM (2 children)
Are the coins being returned, since they are all traceable? Even money the government just seizes and keeps them.
(Score: -1, Offtopic) by Anonymous Coward on Friday February 11 2022, @12:16AM
Biden's planning to keep the $3.6 billion to set up a program to train Black women to be Supreme Court judges.
(Score: 0) by Anonymous Coward on Friday February 11 2022, @04:41PM
When you have Sheriff's robbing armoured cars on highways, it's a fabulously optimistic take to think anyone is going to get their stolen crypto returned.
(Score: 0) by Anonymous Coward on Thursday February 10 2022, @10:03PM
sheesh, one is not allowed to mine the bitfinex mine for raw bitcoins ...
(Score: 0) by Anonymous Coward on Friday February 11 2022, @07:30PM
no such thing as money laundering, you dumb ass pigs. get a fucking job, scum.