Rather than claim insolvency, Bitfinex gave its customers a 36% haircut, repaid them in BFX tokens, and then lost its banking. The 2016 hack set off a string of calamities for the two firms. ( Defiant)īitfinex is the sister company of Tether.
Naturally, LEO saw a surge in value after the announcement. It wants to use 80% of them to “burn” one of its shitcoins - LEO. ( Decrypt)īitfinex is absolutely convinced it will receive the recovered funds. It’s not clear what will happen to the recovered funds at this point, but likely they will be held up by the U.S. Also, Russia has no extradition treaty with the U.S.
But the government, which originally asked for a $100 million bond, ordered a review of the detention order, saying the couple have the means to flee - $330 million in BTC have yet to be found. Even when you are sitting on piles of BTC, as these two allegedly were, it is really difficult to cash out.Ī judge ruled the pair could be released on bonds - $5 million for Lichtenstein $3 million for Morgan. This arrest underscores how difficult it is to actually launder bitcoin. Its amazing how, even years after, darknet market seizures pay dividends to the feds.- Nicholas Weaver February 8, 2022 The feds were able to see through this because they seized AlphaBay. Almost all the money went through AlphaBay, using it as a mixer. One overlooked detail in the Razzlekahn arrest. She had an active TikTok account featuring her rap moves. Morgan is a rapper with loads of embarrassing videos online. We don’t know if the pair were behind the actual theft, but they probably were given the majority of the coins were in the same wallet as when they left Bitfinex.ĭavid Gerard describes the 2016 hack in Chapter 8 of his book “Attack of the 50-foot Blockchain,” as told to him by Phil Potter. (DoJ press release, Complaint, Statement of facts) They were arrested in NYC, where they live. Heather Morgan, 31, and Ilya Lichtenstein, 34, were charged with trying to launder the bitcoins. Most people assumed it was the hackers themselves! 31, those funds were spotted moving out of the hacker’s wallet, but nobody realized at the time it was the feds moving the funds. Federal officials were able to seize 94,643.29 BTC ($3.6 billion). The DOJ found 119,754 bitcoins stolen from crypto exchange Bitfinex in a hack in 2016.