In what is the largest cryptocurrency confiscation, the US Department of Justice has seized stolen Bitcoin worth more than 3.6 billion dollars (£2.65 billion) from a rapper and her husband.
The stolen cryptocurrency has been linked to the hack of Bitfinex, a virtual currency exchange, whose systems were hacked nearly six years ago.
A hacker breached the platform, made more than 2,000 unauthorised transactions and then funnelled the money into a digital wallet allegedly run by Ilya Lichtenstein, 34, of New York, according to Justice Department officials.
Ilya Lichtenstein and his wife, Heather Morgan, were arrested in Manhattan on Tuesday morning and face federal charges for allegedly laundering about 25,000 of the stolen Bitcoin through various accounts over the past five years.
‘Today’s arrests, and the department’s largest financial seizure ever, show that cryptocurrency is not a safe haven for criminals,’ said deputy attorney general Lisa Monaco.
The stolen cryptocurrency valued at $71 million in bitcoin at the time is now worth over $4.5 billion (£3.3 billion).
‘In a futile effort to maintain digital anonymity, the defendants laundered stolen funds through a labyrinth of cryptocurrency transactions. Thanks to the meticulous work of law enforcement, the department once again showed how it can and will follow the money, no matter the form it takes,’ said Monaco.
Investigators from Washington DC, New York, Chicago and Ansbach, Germany collaborated on the lengthy probe.
In a statement, Bitfinex said it had cooperated with the inquiry and was ‘pleased’ the stolen funds had been recovered.
The couple reportedly used various methods to cover their tracks, from fake identities to converting their Bitcoin into other digital currencies before spending the stolen money on items ranging from gold and non-fungible tokens (NFTs) to a $500 Walmart gift card, prosecutors said.
The couple had active public profiles, with Morgan moonlighting as a rapper, ‘Razzlekhan’, a pseudonym that she said on her website referred to Genghis Khan ‘but with more pizzazz’.
In addition to her rap singer profile, Morgan also offered sales and marketing advice in Forbes.
‘When she’s not reverse-engineering black markets to think of better ways to combat fraud and cybercrime, she enjoys rapping and designing streetwear fashion,’ reads her Forbes bio.
One of her recent pieces was titled, in part, ‘Tips to Protect Your Business from Cybercriminal’ and featured an interview with a cryptocurrency exchange owner about how to prevent fraud.
If found guilty, they could each serve up to 25 years in prison.