A husband and wife (couple) on behalf of Ilya Lichtenstein (M/34) and Heather Morgan (F/31) were arrested by the US Department of Justice (DOJ) recently.
The arrests of Lichtenstein and Morgan in New York City are the aftermath of the Bitfinex hacking case in 2016. Bitfinex is a virtual currency exchange company.
The Lichtenstein-Morgan couple hacked Bitfinex and stole 119,754 pieces of Bitcoin (BTC) which are currently estimated to be worth US$4.5 billion or equivalent to Rp. 64.5 trillion.
Lichtenstein and Morgan were also charged with storing stolen Bitcoin into digital wallets under their ownership as well as money laundering.
The reason is, of the nearly 120,000 Bitcoins stolen, around 25,000 Bitcoins have been used as objects for money laundering.
In carrying out this money laundering, Lichtenstein carried out 2,000 complex illegal transactions to multiple accounts and digital wallet platforms.
"This action appears to be designed to conceal the movement of the stolen BTC, making it difficult for law enforcement to trace the funds," IRS investigator Christopher Janczewski said in a written statement.
Lichtenstein and Morgan are said to use a number of sophisticated washing methods in carrying out their actions, ranging from:
Setting up an online account using a fake identity,
Using software to automate transactions,
Depositing stolen funds into accounts on various virtual currency exchanges and darknet markets such as AlphaBay and Hydra. Then withdraw money to hide traces of transactions,
Convert Bitcoin to other digital currencies such as Monero, and
Misusing US based business accounts to legitimize their banking activities.
This case found a bright spot when the DOJ confiscated and closed AlphaBay in July 2017.
This allows law enforcement to access the service's internal transaction history so they can track Bitfinex funds deposited by Lichtenstein.
With a search warrant, law enforcement officers were also finally able to access files that Lichtenstein stored in the cloud.
The file contains the private key needed to access the digital wallet that Lichtenstein and his wife used to store stolen Bitcoin.
"This arrest demonstrates that we will take a firm stand against those who are suspected of trying to use virtual currency for criminal purposes," said Assistant Attorney General Kenneth A. Polite Jr. of the Justice Department's Criminal Division.