Unravel the enigma of the Bitcoin laundering case that left the internet in a state of bewilderment. Delve into the intricate world of cryptocurrency, its vulnerabilities, and the audacious exploits of those who dare to manipulate this digital frontier.
When anonymous hackers infiltrated the cryptocurrency exchange Bitfinex in 2016, it shook the nascent world of digital currency and prompted speculation about who might have stolen what was then $71 million in Bitcoin
Unlike traditional financial transactions, Bitcoin trades are publicly visible – moving the coins risked revealing who was behind the heist.
- At last, it seemed, the hackers had emerged from hiding. But it was not the hackers who had moved the stolen Bitcoin – it was the government, which had seized it as part of an investigation into two New York City entrepreneurs
- Ilya Lichtenstein, 34, and Heather Morgan, 31, were accused of siphoning off chunks of the purloined currency and trying to hide it in a complex network of digital wallets and internet personas.
Friends and Family React
Ms. Morgan’s friends described her as a disarmingly honest colleague in an industry defined by cutthroat competition.
- “It is very jarring to think someone so open and vulnerable with people would have secrets,” one friend, Nora Poggi, said. “She is someone I care a lot about.”
- She works to free herself from a lot of the scripts that are embedded in our society
A Guide to Cryptocurrency
Bitcoin: A digital token that can be sent electronically from one user to another, anywhere in the world
- Blockchain: A database maintained communally that reliably stores digital information
- Coinbase: A platform that allows people and companies to buy and sell various digital currencies, including Bitcoin
- NFTs: An asset verified using blockchain technology
In January 2017, five months after hackers hit Bitfinex, a portion of what they stole was moved in small complex transactions into accounts that the couple controlled.
“This shuffling, which created a voluminous number of transactions, appeared to be designed to conceal the path of the stolen” Bitcoin, the complaint says.
The government has called Lichtenstein and Ms. Morgan “highly sophisticated criminals”
They believed they had significant additional assets, including hundreds of millions of dollars in virtual currency stolen from the Bitfinex exchange that had not been recovered, as well as access to numerous fraudulent identities bought on the so-called darknet
- The government says the couple had also established financial accounts in Russia and Ukraine, and appeared to have been setting up a contingency plan for a life in one of those countries before the pandemic
The couple’s lawyer, Anirudh Bansal, believes the government’s case is weak and relies on “unsupported, conclusory leaps”
Beyond Ms. Morgan’s highly public persona, little is known about the couple.
Over 50 electronic devices
Over $40,000 in cash and substantial amounts of foreign currency
