US federal authorities arrested two individuals on Tuesday on suspicion of involvement in the 2016 hack of the Bitfinex exchange platform. In total, some $3.6 billion in Bitcoin (BTC) was seized.
A record 120,000 BTC seized
The information was released on Tuesday in an official statement on the official website of the U.S. Department of Justice. Two people were arrested this morning in Manhattan, a married couple, Ilya Lichtenstein and Heather Morgan. They are suspected of participating in the hacking of the Bitfinex exchange in 2016.
Two Arrested for Alleged Conspiracy to Launder $4.5 Billion in Stolen Cryptocurrency
Government Seized $3.6 Billion in Stolen Cryptocurrency Directly Linked to 2016 Hack of Virtual Currency Exchangehttps://t.co/4TOI59QVp6 pic.twitter.com/c6EyccGWuc
– Justice Department (@TheJusticeDept) February 8, 2022
Some 120,000 BTC were stolen in this historic hack, or about $60 million at the time. For the record, this represented one-sixth of the total daily transaction volume at the time. According to the US Department of Justice, these two individuals are accused of attempting to launder these funds, but there is no indication at this time that they are the Bitfinex hackers.
To be completely accurate, 119,756 BTC were stolen in this hack. At the time of writing, these funds are valued at approximately $4.5 billion. At the moment, law enforcement has already seized 94,643 bitcoins, or more than $3.6 billion. This represents exactly 79% of the total amount.
The limits of money laundering
This is not the first time we have heard about this case. Back in April, when the price of Bitcoin was peaking, about $600 million worth of BTC was moved for laundering. A few months earlier, in November 2020, in a still favourable market context, other movements of funds linked to this hack had already taken place.
But despite these recurring movements, the near-entirety of the stolen bitcoins has not moved one iota. How come the hackers didn’t manage to get rid of their stolen treasure? Logically enough, these tokens are extremely closely monitored and their every move is spied on.
Already, stolen bitcoins are blacklisted from centralized exchange platforms and will never be accepted and thus exchanged for fiat currencies. As for the other decentralised services, they have limitations in terms of liquidity or identity verification that have prevented hackers from breaking into them.
“Today, federal law enforcement is demonstrating once again that we can follow money through the blockchain, and that we will not let cryptocurrencies become a haven for money laundering or a no-go zone within our financial system,” said Assistant Attorney General Kenneth A. Polite Jr.
Contrary to what some may imagine, the “anonymising” nature of blockchain does not serve money laundering, quite the contrary. It allows the stolen money to be identified and tracked constantly, as if a chip were placed on each banknote stolen during a robbery.
