Digital Forensics Dispatch

Couple Arrested After Laundering Nearly $4.5 Billion Worth of Bitcoin

February 10, 2022

Sarah Coble, of Infosecurity Magazine, published an article on February 9, 2022 about a TikTok rapper and her husband allegedly laundering stolen bitcoin. Heather Morgan, 31, and Ilya’ Dutch’ Lichtenstein, 34, were both arrested on Tuesday February 8, 2022.

The married couple was accused of conspiring to launder the profits of 199,754 bitcoin, stolen from Bitfinex’s platform in 2016. This became possible after a threat actor, a group or individual who locates and attacks technological vulnerabilities, accessed Bitfinex’s IT systems, and executed over 2,000 unauthorized transactions.

In addition, court documents revealed that the bitcoin stolen by the fraudulent transactions were sent to Lichtenstein’s digital wallet. The US Department of Justice released a statement; “Over the last five years, approximately 25,000 of those stolen 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 DOJ also said, “the remainder of the stolen funds, comprising more than 94,000 Bitcoin, remained in the wallet used to receive and store the illegal proceeds from the hack.” While special agents were carrying out search warrants of Lichtenstein’s online accounts, they found files that contained the private keys to unlock the digital wallet, to which the illegal funds were transferred.

The special agents used the private keys to recover over 94,000 stolen Bitcoin, valued at more than $3.6 billion when they were seized.

Both defendants are charged with conspiracy to commit money laundering and conspiracy to defraud the United States. If they are convicted on both charges, Lichtenstein and Morgan could serve a maximum of 25 years in prison each.

The assistant attorney general Kenneth Polite stated that this case showed that federal law enforcement “can follow money through the blockchain.”

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