Russian Emigrant and Wife Admit Guilt in Laundering €4.1 Billion from Stolen Bitcoins on Bitfinex
The couple responsible for laundering billions of dollars in bitcoins during the 2016 cryptocurrency heist has confessed to their involvement as part of a plea deal with investigators.
Russian emigrant Ilya "The Dutch" Lichtenstein, who resided in New York, admitted to being the initial bitcoin hacker during the Bitfinex breach in 2016. In federal court, he pleaded guilty to conspiracy to launder the stolen cryptocurrency, with a value of 4.1 billion euros in total.
His wife, Heather Rhiannon Morgan, also pleaded guilty to money laundering conspiracy and conspiracy to defraud the United States government.
Prior to their court admission, the identity of those behind the cryptocurrency exchange hack and bitcoin theft had not been publicly known. Lichtenstein converted some of the cryptocurrency into gold, which his wife later concealed in California.
When they were arrested in February 2022, the U.S. Department of Justice stated that over 94,000 bitcoins out of more than 119,000 stolen ones were seized.
"After their arrest, the government seized an additional approximately $475 million associated with the hack," the Department of Justice's press statement read on Thursday.
Bitfinex responded with a statement, saying, "Following the hack of Bitfinex in August 2016, we have made unprecedented efforts to make our customers whole."
"Bitfinex has also worked diligently with the U.S. Department of Justice to identify the hackers, return the stolen bitcoin, and bring them to justice. After seven years, these efforts have been successful."
The U.S. Department of Justice referred to this case as the largest-ever forfeiture in history. It took years before the perpetrators were found by the American justice system.
Reportedly, Lichtenstein confessed to his wife about the hack in 2020. Their trips to Kazakhstan and Ukraine were found to be aimed at laundering money by transferring it to accomplices with foreign bank accounts. They managed to deceive the police by transferring bitcoins using various forged identifications. Eventually, the couple's arrest was triggered by a $500 gift card from the American supermarket chain Walmart. The online gift card was sent to a Russian email address, which was later linked to Lichtenstein.
The couple opened foreign bank accounts to launder money and even hid coins. At the time of the hack, the 119,754 stolen bitcoins were worth 65 million euros. By the time of their arrest in February 2022, this amount had grown to 4.1 billion euros.
Following their arrests last year, Netflix announced that it had commissioned a series about this couple.