BTC from Bitfinex hack seized by US investigators

Investigators have managed to make perhaps the largest seizure in US criminal history with more than $3.6 billion in BTC. These BTC came from a 2016 Bitfinex break-in, according to the U.S. Attorney’s Office, when unknown persons had withdrawn a total of nearly 120,000 Bitcoin from customer accounts and transferred them all to a Bitcoin wallet. The amount of damage back then was worth about $71 million, today they are worth about $4.5 billion.

That even caused the bitcoin price to plummet in 2016. Starting in 2017, a New York couple apparently went to great lengths to launder the loot. According to the investigating tax authorities, they used at least ten different crypto exchanges, various accounts under their own and invented names, shell companies, exchanged into various other cryptocurrencies, bought gold, withdrew from crypto ATMs, and bought gift certificates with Bitcoin. The perpetrators also allegedly bought NFTs with the BTC.

Money laundering mistakes

However, the perpetrators allegedly used the same IP address over and over again and often a specific Indian email provider. Gift vouchers were uploaded to their own plain-name accounts and the purchased gold was delivered directly to their home address. The couple’s undoing, however, was an encrypted file that the husband had stored in an American cloud storage facility. According to the authorities, this contains a list of 2,000 addresses of cryptocurrency wallets with the associated private keys. This list could be decrypted by a government agency, and since the list also contained the central bitcoin wallet, investigators were able to seize the 94,636 bitcoin remaining in it on Feb. 4.

The cloud storage also contained a list of false identities that the couple had allegedly used. The U.S. Justice Department is celebrating the largest seizure in its history. “Today’s arrest shows that cryptocurrencies are not a safe haven for criminals,” Deputy Attorney General Lisa Monaco said Feb. 8. “In a vain attempt to maintain digital anonymity, the defendants grew stolen funds through a maze of cryptocurrency transactions. Thanks to the meticulous work of investigators, the Department has once again shown how it can and does follow the money trail, no matter what form it takes.”

This is a great example that the idea behind the blockchain works. We see this as confirmation of our work and continue to focus on serious and legal forms of investment, as “shortcuts” are no longer worthwhile in the blockchain age.

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