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US Justice Department makes largest-ever financial seizure after recovering $3.6 billion worth of bitcoin tied to 2016 hack of Bitfinex

Dado Ruvic/Reuters

Dado Ruvic/Reuters

  • The US Department of Justice seized $3.6 billion worth of bitcoin related to the 2016 Bitfinex hack.
  • The recovery is the largest-ever financial seizure by the department.
  • Law enforcement arrested two suspects in Manhattan for allegedly trying to launder the proceeds. 
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US law enforcement seized billions worth of bitcoin tied to the 2016 hack of crypto exchange Bitfinex.

In a Tuesday press release, the US Department of Justice said it retrieved approximately 94,000 bitcoins — worth $3.6 billion at the time of seizure — linked to the hack, in which 120,000 bitcoins worth $70 million at the time was stolen from customer accounts. It marks the department’s largest seizure of financial assets ever. 

“Today, federal law enforcement demonstrates once again that we can follow money through the blockchain, and that we will not allow cryptocurrency to be a safe haven for money laundering or a zone of lawlessness within our financial system,” Assistant Attorney General Kenneth A. Polite Jr. of the Justice Department’s Criminal Division said in the press release.

In conjunction with the bitcoin seizure, law enforcement arrested two suspects in Manhattan and charged them with laundering the stolen cryptocurrency and conspiring to defraud the United States.

The Justice Department alleged 34-year-old Ilya Lichtenstein and his wife, 31-year-old Heather Morgan, conspired to launder the proceeds from the Bitfinex hack from a digital wallet under Lichtenstein’s control. According to the press release, law enforcement discovered the private keys required to access the wallet and recovered 94,000 stolen bitcoin.

Over the last five years, the other 25,000 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 press release said. 

In 2016, the Bitfinex hack became the second-largest bitcoin heist from a crypto-exchange, after the 2014 hack and subsequent collapse of Tokyo’s Mt. Gox, in which 850,000 bitcoin were lost. In a statement, Bitfinex said it was “pleased” the Justice Department recovered much of the bitcoin and added that it has been cooperating with the department since the investigation began. 

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