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Feds arrest couple, seize $3.6B in hacked Bitcoin funds

washingtonpost.com

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Re: Feds arrest couple, seize $3.6B in hacked Bitcoin funds

#71

Post by mdoms »

loceng wrote: post #14

I ask this every so often during threads regarding stolen cryptocurrency: Is there any solution yet to preventing stolen cryptocurrency funds from being spent? Isn't the only solution to have a central database and require laws to require every transaction to be pre-checked to see if it's stolen funds or not? And not only that, the centralized system will have to be constantly keeping track of wallet mixing to see wh…

Some organisations already have such systems in place. Take for example this Redditor who lost hundreds of thousands of dollars because someone some time in the past pushed his coins through a mixer.

https://www.reddit.com/r/blockfi/comments/skxiei/blockfi_hor...

Re: Feds arrest couple, seize $3.6B in hacked Bitcoin funds

#72

Post by smartties »

throwaway110535 wrote: post #17

25 years max for stealing billions? God bless America. > Lichtenstein and Morgan are charged with conspiracy to commit money laundering, which carries a maximum sentence of 20 years in prison, and conspiracy to defraud the United States, which carries a maximum sentence of five years in prison. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statut…

Are they being charged for stealing? I thought the concept of crypto is to be you own bank, So as long as you have the private key, you are now technically the owner. What if two people generate the same private key. Who is the owner ?

Re: Feds arrest couple, seize $3.6B in hacked Bitcoin funds

#73

Post by AlexanderTheGr8 »

openhandcrimp wrote: post #32

It seems that Tornado Cash ( https://tornado.cash/ ) could have been used to launder the funds. I wonder if: - Laundering happened before Tornado Cash existed, so Tornado Cash was not used - They used something like Tornado Cash, but the funds were still traceable

That was my first question as well. But for someone who stores private keys of coins worth billions of dollars on google drive, I don't think using a mixer was a big concern.

They couldn't even bother to use strong encryption on the file of private keys. Crypto 101: never store private keys online.

Re: Feds arrest couple, seize $3.6B in hacked Bitcoin funds

#74

Post by duxup »

caseysoftware wrote: post #65

I'm sitting here trying to understand their mindset. They had to know what kind of scrutiny would be on those coins forever. At the time of the theft, the coins are worth $100M+ and they can't touch them. Even worse, anything they do with them will be monitored, researched, dug into, and everything else from law enforcement, amateur detectives, and every major tech+crime group. Fast forward to now and the coins are w…

I was wondering about this. I would think the most obvious path would be to find some other criminals (now you've got new risks) who don't care about the provenance of the coins, will pay cash for some coins at a discount, and you somehow launder that cash....

Could at least get a couple bucks from it, possibly.

Re: Feds arrest couple, seize $3.6B in hacked Bitcoin funds

#75

Post by CPLX »

throwaway110535 wrote: post #17

25 years max for stealing billions? God bless America. > Lichtenstein and Morgan are charged with conspiracy to commit money laundering, which carries a maximum sentence of 20 years in prison, and conspiracy to defraud the United States, which carries a maximum sentence of five years in prison. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statut…

I am just guessing here but it's likely that there are multiple counts of these charges.

Re: Feds arrest couple, seize $3.6B in hacked Bitcoin funds

#76

Post by AlexanderTheGr8 »

duxup wrote: post #68
AlexanderTheGr8 wrote: post #64

> “After the execution of court-authorized search warrants of online accounts controlled by Lichtenstein and Morgan, special agents obtained access to files within an online account controlled by Lichtenstein,” the press release said. “Those files contained the private keys required to access the digital wallet that directly received the funds stolen from Bitfinex, and allowed special agents to lawfully seize and rec…

Well you don't want to lose those keys ... there is a bit of a conundrum there (granted you don't have to do it the way they did either). As far as how exactly they got caught, there was a reward offered by the company it was stolen from. It may have been someone tipped the feds off for the reward.

Crypto 101: never store private keys online.

Re: Feds arrest couple, seize $3.6B in hacked Bitcoin funds

#77

Post by gruez »

throwaway110535 wrote: post #50
gruez wrote: post #30

Earlier quoted context omitted.

>25 years max for stealing billions? 1. The bitcoins were only worth ~$70 million at the time of theft. saying they stole "billions" is highly misleading 2. I don't get it, aren't we supposed to be getting less "tough on crime", especially for non-violent offenses?

1. Just quoting the amount mentioned in the press release. I guess its highly misleading too? 2. Supposed to be, but we all know that folks are sitting in jail right now for longer periods of time for stealing less.

>2. Supposed to be, but we all know that folks are sitting in jail right now for longer periods of time for stealing less.

Example?

The US sentencing guidelines[1] considers multiple factors other than "value stolen"

https://www.ussc.gov/guidelines/2021-guidelines-manual-annot...

Re: Feds arrest couple, seize $3.6B in hacked Bitcoin funds

#78

Post by openhandcrimp »

AlexanderTheGr8 wrote: post #73
openhandcrimp wrote: post #32

It seems that Tornado Cash ( https://tornado.cash/ ) could have been used to launder the funds. I wonder if: - Laundering happened before Tornado Cash existed, so Tornado Cash was not used - They used something like Tornado Cash, but the funds were still traceable

That was my first question as well. But for someone who stores private keys of coins worth billions of dollars on google drive, I don't think using a mixer was a big concern. They couldn't even bother to use strong encryption on the file of private keys. Crypto 101: never store private keys online.

Good point!

Re: Feds arrest couple, seize $3.6B in hacked Bitcoin funds

#79

Post by duxup »

throwaway110535 wrote: post #17

25 years max for stealing billions? God bless America. > Lichtenstein and Morgan are charged with conspiracy to commit money laundering, which carries a maximum sentence of 20 years in prison, and conspiracy to defraud the United States, which carries a maximum sentence of five years in prison. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statut…

It's not clear that this is the end of the charges.

Re: Feds arrest couple, seize $3.6B in hacked Bitcoin funds

#80

Post by khuey »

smartties wrote: post #72
throwaway110535 wrote: post #17

25 years max for stealing billions? God bless America. > Lichtenstein and Morgan are charged with conspiracy to commit money laundering, which carries a maximum sentence of 20 years in prison, and conspiracy to defraud the United States, which carries a maximum sentence of five years in prison. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statut…

Are they being charged for stealing? I thought the concept of crypto is to be you own bank, So as long as you have the private key, you are now technically the owner. What if two people generate the same private key. Who is the owner ?

They're charged with money laundering.
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