DailyPost 2975
CRYPTO HACKERS JAILED
When it comes to crypto currencies being laundered or used in crimes or for sale of drugs or hacking of crypto exchanges, the investigation throws up multifarious challenges; legal, tech, logistical and connected to geography, that an investigative success is like winning a war. Recently we heard of WazirX in our own backyard. The whole history of these investigative breakthroughs started in 2013 when the FBI initiated a comprehensive investigation into Silk Road. FBI’s use of digital forensics was commendable, meticulously tracking Bitcoin transactions and finally arresting Ross Ulbricht.
More than a decade down the line and many landmark police investigations in between, the recent sentencing of crypto hackers to five years imprisonment deserves all accolades. The crime in question is a breach which led to the theft of nearly 120,000 bitcoins, the current value can be pegged at an astronomical $10.5 billion. The offence relates to 2016 when Lichtenstein was able to infiltrate Bitfinex’s network. After being successful in getting the access, he was able authorise 2,000 unauthorised transactions, which led to the transferring approximately 119,754 bitcoins into his personal cryptocurrency wallet. In August 2023 Ilya Lichtenstein pleaded guilty to the money laundering conspiracy.
Lichtenstein’s wife Heather Morgan pleaded guilty to one count of money laundering and also for one count of conspiracy to defraud the US. After having committed the offence the main accused deleted access credentials and log files from the exchange network. The funds were laundered through a web of tactics which included the creation of fake identities to open online banking accounts. The modus operandi was using darknet markets and cryptocurrency exchanges engaged in “Chain Hopping.” Chain hopping led to the conversion of funds into different cryptocurrencies.
The accused also used mixing services like the Bitcoin Fog. Through all these complex tech fraud processes a part of the stolen cryptocurrency was converted into fiat currency and the same was deposited into US banks, while another was exchanged for gold coins. The couple’s nemesis came when their purchase of Walmart gift cards with stolen funds was tracked. It was redeemed in Morgan’s name. This led to a search warrant and one after the other the missing pieces started falling in place, for his final breakthrough and sentencing to happen. Lichtenstein was the primary architect of the fraud and Morgan later willingly participated in the laundering operations. Interestingly, Roman Sterlingov, founder of Bitcoin Fog, has already been sentenced for facilitating money laundering between 2011 to 2021.
CRYPTOCURRENCY HAS TAKEN FINANCIAL FRAUD AND MONEY LAUNDERING TO A DIFFERENT LEVEL.
Sanjay Sahay
Have a nice evening.