Feds arrest couple, seize $3.6B in hacked Bitcoin funds
washingtonpost.com
Feds arrest couple, seize $3.6B in hacked Bitcoin funds
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Re: Feds arrest couple, seize $3.6B in hacked Bitcoin funds
#2> The Justice Department announced Tuesday it had seized more than $3.6 billion in bitcoin allegedly stolen as part of a 2016 hack of Bitfinex, saying authorities have also arrested and charged a husband and wife in New York for allegedly trying to launder the cryptocurrency fortune.
> Officials said Ilya Lichtenstein, 34, and his wife, Heather Morgan, 31, were arrested on charges of conspiring to launder money. They are accused of trying to launder 119,754 bitcoin that were stolen after a hacker breached Bitfinex, a cryptocurrency exchange, and initiated more than 2,000 unauthorized transactions. Prosecutors said the bitcoin was sent to a digital wallet controlled by Lichtenstein.
From the actual charging statement (https://www.justice.gov/opa/press-release/file/1470186/downl...), the Feds have more details and fascinating traces through the various methods which the accused laundered the funds. Raises the question of whether they would've attracted so much attention if it were "only" a $70M hack instead of the multibillion dollar one due to BTC appreciation.
> In or around August 2016, a hacker breached Victim VCE’s security systems and infiltrated its infrastructure. While inside Victim VCE’s network, the hacker was able to initiate over 2,000 unauthorized BTC transactions, in which approximately 119,754 BTC was transferred from Victim VCE’s wallets to an outside wallet. At the time of the breach, 119,754 BTC was valued at approximately $71 million. Due to the increase in the value6 of BTC since the breach, the stolen funds are valued at over $4.5 billion as of February 2022.
Re: Feds arrest couple, seize $3.6B in hacked Bitcoin funds
#3The statement of facts is linked to from the press release, and describes generally how the Feds were able to trace the stolen funds (they found a file listing private keys, after gaining access to the suspect's cloud storage)
https://www.justice.gov/opa/press-release/file/1470186/downl...
> The 2017 transfers notwithstanding, the majority of the stolen funds remained in Wallet 1CGA4s from August 2016 until January 31, 2022. On January 31, 2022, law enforcement gained access to Wallet 1CGA4s by decrypting a file saved to LICHTENSTEIN’s cloud storage account, which had been obtained pursuant to a search warrant. The file contained a list of 2,000 virtual currency addresses, along with corresponding private keys.
> ...The connection among the VCE 1 accounts was further confirmed upon reviewing a spreadsheet saved to LICHTENSTEIN’s cloud storage account. The spreadsheet included the log-in information for accounts at various virtual currency exchanges and a notation regarding the status of the accounts
> ...Lichtenstein Email 2 was held at a U.S.-based provider that offered email as well as cloud storage services, among other products. In 2021, agents obtained a copy of the contents of the cloud storage account pursuant to a search warrant. Upon reviewing the contents of the account, agents confirmed that the account was used by LICHTENSTEIN. However, a significant portion of the files were encrypted
Re: Feds arrest couple, seize $3.6B in hacked Bitcoin funds
#4Shouldn't all true crypto believers hate this news?
It's the government trying to enforce their opinion of who should own those Bitcoins, thereby taking power away from the owner that the network has decided on, which would be "whoever has the cryptographic keys".
Re: Feds arrest couple, seize $3.6B in hacked Bitcoin funds
#5The statement of facts is linked to from the press release, and describes generally how the Feds were able to trace the stolen funds (they found a file listing private keys, after gaining access to the suspect's cloud storage) https://www.justice.gov/opa/press-release/file/1470186/downl... > The 2017 transfers notwithstanding, the majority of the stolen funds remained in Wallet 1CGA4s from August 2016 until January 3…
$4 billion has got to buy an awful lot of compute time, but still, how did they decrypt the file?
Re: Feds arrest couple, seize $3.6B in hacked Bitcoin funds
#6fwiw, it appears one of the named here is a YC Alum:
https://news.ycombinator.com/user?id=il
https://www.linkedin.com/in/unrealdutch/
Re: Feds arrest couple, seize $3.6B in hacked Bitcoin funds
#7"Today Ilya Lichtenstein is the co-founder of the Y Combinator backed Mix Rank,"
One of the first Google results for the names returns 'Get your first $1 million in enterprise sales with zero marketing spend' https://www.youtube.com/watch?v=DuIr5IFQ9Xg
Heather R Morgan
Serial entrepreneur SaaS Investor Razzlekhan = Surrealist Artist, Rapper & Fashion Designer with synesthesia Also Forbes writer
https://www.inc.com/heather-r-morgan/dont-hire-a-salesperson...
"As I build a sales team for my latest software startup, Endpass"
Endpass "Bringing you the delightful and secure Ethereum wallet that's easy enough for grandma to use."
Wait, so did Feds nab them for running Ethereum wallet startup and claim $3B in client wallets as theirs? Or did the pair start Ethereum wallet company to wash stolen coints?
Re: Feds arrest couple, seize $3.6B in hacked Bitcoin funds
#8The statement of facts is linked to from the press release, and describes generally how the Feds were able to trace the stolen funds (they found a file listing private keys, after gaining access to the suspect's cloud storage) https://www.justice.gov/opa/press-release/file/1470186/downl... > The 2017 transfers notwithstanding, the majority of the stolen funds remained in Wallet 1CGA4s from August 2016 until January 3…
$4 billion has got to buy an awful lot of compute time, but still, how did they decrypt the file?
A fancy (or even basic) dictionary attack has a very high chance of working.
Re: Feds arrest couple, seize $3.6B in hacked Bitcoin funds
#9fwiw, it appears one of the named here is a YC Alum: https://news.ycombinator.com/user?id=il https://www.linkedin.com/in/unrealdutch/
That's a nice username I guess.
Re: Feds arrest couple, seize $3.6B in hacked Bitcoin funds
#10"Today Ilya Lichtenstein is the co-founder of the Y Combinator backed Mix Rank," One of the first Google results for the names returns 'Get your first $1 million in enterprise sales with zero marketing spend' https://www.youtube.com/watch?v=DuIr5IFQ9Xg Heather R Morgan Serial entrepreneur SaaS Investor Razzlekhan = Surrealist Artist, Rapper & Fashion Designer with synesthesia Also Forbes writer https://www.inc.com/he…
Did Mix Rank take bitcon?