New York resident confesses to hacking Bitfinex in 2016

By crypto.news August 04, 2023 In Bitfinex

Ilya Lichtenstein, a resident of New York, has confessed to his involvement in the laundering of stolen Bitcoin worth $4.5 billion that was taken during the 2016 Bitfinex hack.

This is a significant development as the hacker’s identity was previously unknown.

Despite doubts about the couple’s capacity for orchestrating such a crime, blockchain records revealed a clear trail from Bitfinex to a wallet found in Lichtenstein’s possession by authorities.

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In February 2022, the U.S. Department of Justice (DoJ) seized a significant amount of stolen Bitcoin after making arrests. This action marked the biggest asset forfeiture operation that the department has ever conducted.

While Lichtenstein has pleaded guilty, the couple has yet to be charged with the cyberattack.

The guilty plea comes seven years after Bitfinex was hacked.

Federal law enforcement and prosecutors worked for six years to find stolen funds. They discovered that most of the money was still in a wallet and hadn’t been used.

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The investigation traced the movement of the currency from the wallet to the traditional banking system, leading to the identification of the suspects.

The incident highlights the challenges of laundering cryptocurrency, as the transactions are permanently recorded on the blockchain. Despite the frequent occurrence of crypto hacks, identifying the perpetrators provides a sense of security that bad actors can be held accountable.

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