Police Targeting Bitfinex Hackers After Launderers Arrested

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  • The 2016 Bitfinex hackers could soon be in authorities’ sights after the launderers of the hack were arrested
  • Ilya Lichtenstein and his wife Heather Morgan are accused of conspiring to launder $4.5 billion in bitcoin
  • The pair already laundered an unknown quantity of the bitcoin for themselves

U.S. authorities have moved a step closer to solving the 2016 hack on the Bitfinex exchange after arresting the individuals who laundered the majority of the bitcoin stolen in the hack. Ilya Lichtenstein and his wife Heather Morgan were arrested yesterday in news that made headlines across the world, five and a half years after they took possession of 119,754 stolen from the exchange. Authorities investigating the case will now be hoping that the pair can lead them to the hackers who used Lichtenstein and Morgan to funnel the money away from the exchange.

Unlikely Launderers Made Headlines

The Bitfinex hack took place in August 2016 when hackers managed to get into Bitfinex’s system and steal the bitcoin haul, which, over the course of 2,000 transactions, was sent to a Bitcoin wallet under Lichtenstein’s control. Via a “complicated money laundering process”, 25,000 has been sent from this wallet to financial accounts controlled by the pair over the past five and a half years, some of which they have used to fund a lavish lifestyle.

Amazingly, Morgan had her own social media presence as a ‘rapper’, boasting about how she turned her small business into one turning over tens of millions of dollars:

94,000 Still in Original Bitfinex Hack Wallet

The remaining 94,000-odd bitcoin stayed in the initial wallet that received the funds from the hack, presumably with intentions to send it to the hackers when they asked for it at some point in the future.

However, investigators obtained a warrant to access the cloud accounts for Lichtenstein and Morgan, where they came across the wallet’s private key stored in an unencrypted file. They transferred the bitcoin to their own wallets, worth over $3.6 billion, and arrested the pair.

Prosecutors will now likely try and strike a deal with Lichtenstein and Morgan to reveal who they had dealings with over the Bitfinex hack, the proceeds of which should be returned to the exchange. The hackers themselves will likely be feeling the heat now, knowing that if Lichtenstein and Morgan were so bad at hiding their cut of the crime then they might be equally as bad at keeping their mouths shut.