DOJ arrests couple in connection with $4.5 billion cryptocurrency hack

The Department of Justice (DOJ) announced on Tuesday that a married couple was arrested and charged for their alleged links to cryptocurrency stolen from a 2016 hack of Bitfinex, a virtual currency exchange. 

Ilya Lichtenstein, 34, and his wife Heather Morgan, 31, were arrested in New York City and charged with conspiracy to commit money laundering and conspiracy to defraud the United States, DOJ officials said on Tuesday. 

The duo repeatedly misled financial institutions and virtual currency exchanges about their identities and about the origins of their Bitcoin, according to federal prosecutors, who said the money was cashed out and used to purchase gold, NFTs and other items, such as a $500 Walmart gift card.

The stolen currency from the hack is currently valued at $4.5 billion, and law enforcement has seized over $3.6 billion in connection to the incident.

“Today’s arrests, and the Department’s largest financial seizure ever, show that cryptocurrency is not a safe haven for criminals,” Deputy Attorney General Lisa Monaco said in a statement.

“In a futile effort to maintain digital anonymity, the defendants laundered stolen funds through a labyrinth of cryptocurrency transactions. Thanks to the meticulous work of law enforcement, the department once again showed how it can and will follow the money, no matter the form it takes,” Monaco added.

The couple’s alleged crime came after a hacker breached Bitfinex’s systems and allegedly conducted more than 2,000 fraudulent transactions. 

Bitfinex announced in 2020 that it would offer a reward worth up to $400 million to any one who led the company to the people responsible for the 2016 attack. 

“We have been cooperating extensively with the DOJ since its investigation began and will continue to do so,” the company said on Tuesday, adding that it would “work with the DOJ and follow appropriate legal processes to establish our rights to a return of the stolen bitcoin.”

The case is ongoing, and Lichtenstein and Morgan are expected to appear in federal court on Tuesday afternoon.

If convicted, they could face up to 20 years in prison for conspiracy to commit money laundering charges and up to five years for conspiracy to defraud the U.S.

Updated at 4:12 p.m.