Blockchain is not untraceable and cryptocurrency is not a safe haven for cybercriminals says the US Department of Justice.
In what is seen as the largest ever financial seizure by the US Justice Department, close to $3.6 billion worth of bitcoin were recovered from a cryptocurrency exchange hack that dates back to 2016.
The two criminals, Ilya Lichtenstein and Heather Morgan, both promoted themselves as deep-tech entrepreneurs with expertise in the cryptocurrency field.
The suspects had conspired to launder close to 120,000 bitcoins that were stolen from the exchange platform, Bitfinex, back in 2016, when a hacker breached the systems of the exchange and managed to engage in more than 2,000 illegal transactions.
The biggest takeaway from the bust, however, is that the Department of Justice claimed it was able to track the money through the blockchain network, and warned cybercriminals that cryptocurrency is not a safe haven for illegal transactions.
“Today, federal law enforcement demonstrates that we can follow the money through the blockchain and that we will not allow cryptocurrency to be a safe haven for money laundering,” said Assistant Attorney General Kenneth A. Polite Jr. of the Justice Department’s Criminal Division.
These transactions were conducted with the utilisation of programs to automate bitcoin movements, with a focus on concealing their origin, however, some of the funds eventually landed in the accounts of the couple, which gave federal police a tip-off.
“In a futile effort to maintain digital anonymity, the defendants laundered stolen funds through a labyrinth of cryptocurrency transactions,” said Deputy Attorney General Lisa Monaco.
In 2016, the Hong Kong-based digital currency exchange Bitfinex announced that it had come under attack, this caused the value of bitcoin to drop drastically. The bitcoin, worth $4.5 billion now, was valued at around $70 million in 2016.
However, it is to be noted that the Justice Department was unable to charge them with the hack of Bitfinex, with two charges being levied currently, money laundering and conspiracy to defraud the United States.