The United States Department of Justice (DOJ) has set up a website to collect statements from people affected by the 2016 Bitfinex hack.
The initiative aims to provide potential victims an opportunity to relay how they may have been impacted by the criminal conduct of Ilya Lichtenstein and his wife, Heather Morgan. The initiative was announced in a Nov. 7 Department of Justice press release.
While the DOJ's position is that there are no victims under the Crime Victims’ Rights Act (CVRA) for the offenses of conviction, the department is providing this notice to the public to ensure that anyone potentially harmed by the defendants' actions can be heard. This includes affected Bitfinex account holders.
In August 2016, Ilya Lichtenstein infiltrated the cryptocurrency exchange Bitfinex, resulting in the theft of approximately 120,000 Bitcoin (BTC) and Bitcoin Cash (BCH). When the assets were stolen, they were worth approximately $72 million. But now, the stolen Bitcoin alone is worth about $9.2 billion.
Following the breach, Lichtenstein developed a complex scheme to launder the stolen assets. This plan involved multiple layers of transactions, the use of cryptocurrency mixers, engagement with non-compliant exchanges, utilization of darknet markets, and transferring funds through bank accounts both in the United States and abroad.
Heather Morgan assisted Lichtenstein in laundering the illicit funds. The couple continued their activities until their arrest in February 2022. They were charged with conspiracy to commit money laundering and conspiracy to defraud the United States.
On August 3, 2023, Lichtenstein pleaded guilty to one count of money laundering conspiracy. His sentencing is scheduled for Nov. 14, 2024—with the Department of Justice recommending a sentence in excess of five years. On the same day last August, Morgan pleaded guilty to one count of money laundering conspiracy and one count of conspiracy to Defraud the United States. Her sentencing is set for Nov. 15, 2024.
The report follows a hacker recently draining $20 million from a United States government cryptocurrency wallet containing assets seized from the Bitfinex hack, only to return most of the funds mere days later. About $19.3 million worth of funds had been returned, but some funds were transferred to exchanges and have not been sent back.
Edited by Stacy Elliott.