[DataBreaches] Husband and Wife Plead Guilty to Money Laundering Conspiracy Involving the Hack and Theft of Billions in Cryptocurrency

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There’s an update to the case involving the arrest of a married couple charged with laundering $4.5 billion in cryptocurrency stolen from Bitifinex in 2016. Ilya Lichtenstein, 35, and Heather Morgan, 33, from New York City pleaded guilty today to money laundering conspiracies arising from the hack and theft of approximately 120,000 bitcoin from Bitfinex, a global cryptocurrency exchange. At the time of the arrest, the government seized approximately 95,000 of the stolen Bitcoin from wallets in the defendants’ control. The recovered funds were valued at approximately $3.6 billion at the time. Since their arrests, the government has seized another approximately $475 million tied to the hack. According to court documents, Lichtenstein used a number of hacking tools and techniques to gain access to Bitfinex’s network. Once inside their systems, Lichtenstein was able to fraudulently authorize more than 2,000 transactions in which 119,754 bitcoin was transferred from Bitfinex to a cryptocurrency wallet in Lichtenstein’s control. Lichtenstein then took steps to cover his tracks by going back into Bitfinex’s network and deleting access credentials and other log files that may have given him away to law enforcement. Following the hack, Lichtenstein enlisted the help of his wife, Heather Morgan, in laundering the stolen funds. As part of their pleas, Lichtenstein and Morgan admitted that Lichtenstein, at times with Morgan’s assistance, employed numerous sophisticated laundering techniques, including using fictitious identities to set up online accounts; utilizing computer programs to automate transactions; depositing the stolen funds into accounts at a variety of darknet markets and  cryptocurrency exchanges and then withdrawing the funds, which obfuscates the trail of the transaction history by breaking up the fund flow; converting bitcoin to other forms of  cryptocurrency, including anonymity-enhanced  cryptocurrency (AEC), in a practice known as “chain hopping”; depositing a portion of the criminal proceeds into cryptocurrency mixing services, such as Bitcoin Fog, Helix, and ChipMixer; using U.S.-based business accounts to legitimize their banking activity; and exchanging a portion of the stolen funds into gold coins, which Morgan then concealed by burying them. Lichtenstein pleaded guilty to conspiracy to commit money laundering, which carries a maximum sentence of 20 years in prison. Morgan pleaded guilty to one count of money laundering conspiracy and one count of conspiracy to defraud the United States, each of which carries a maximum sentence of five years in prison. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors. Read more at the U.S. Attorney’s Office, District of Columbia

https://www.databreaches.net/husband-and-wife-plead-guilty-to-money-laundering-conspiracy-involving-the-hack-and-theft-of-billions-in-cryptocurrency/

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