A federal judge has outlined the necessary bond conditions before releasing two suspects connected with laundering Bitcoin stolen from Bitfinex in 2016. The two, Ilya Lichtenstein and Heather Morgan, were arrested yesterday for their connection to the Bitfinex hack over five years ago.
Earlier, a magistrate judge from New York had sentenced them to home detention with a five million bond for Lichtenstein and three million USD for Morgan.
The first bond condition was for their parents to be present and their homes provided as collateral. The court also said that Lichtenstein and Morgan can only spend a maximum of 10K US dollars to pay for their monthly expenses.
Despite the provision, they cannot milk their accounts dry or initiate virtual currency transactions.
That’s not all. The two were asked to surrender their mobile phones and computing devices. For making calls and accessing the internet, they’ll be provided with an internet-enabled device under the watch of pretrial services.
According to the DOJ, Lichtenstein and Morgan conspired to swindle the US and launder money but didn’t conduct the Bitfinex hack directly.
DOJ Seizes 119,756 BTCs Stolen from Bitfinex in 2016
Their arrest was tied to the 119,756 BTC from the Bitfinex cryptocurrency exchange seized by the law enforcement agencies in the United States.
In a statement on February 8, the DOJ indicated that it had okayed the arrest of Lichtenstein and Morgan, who are a couple.
Since the 2016 security breach of the crypto trading platform, suspected hackers have been moving small amounts of the illicit funds into different wallets. The DOJ revealed that 25,000 Bitcoins were traced to wallets controlled by the couple.
Investigators recovered 94K BTC from Lichtenstein and Morgan after gaining access to a file storing private keys to different wallets.
Commenting on their arrest, Lisa Monaco, the Deputy Attorney General, said that the incident indicates that virtual currencies are “not a safe haven for criminals.”
Law enforcement agencies unearthed several ways used by the couple to launder the money. For example, they automated transactions and deposited on exchanges before withdrawing the funds.
Although law enforcement agencies conducting the investigations declined to reveal how they got to Lichtenstein and Morgan, they indicated they have the necessary “tools to follow the digital trail.”
Economics and Psychology Meet
Details released by the DOJ show that the two spent some of the proceeds on non-fungible tokens (NFTs) and precious metals.
A New York resident, Heather Morgan is a rapper, a writer, and an entrepreneur. According to her LinkedIn page, she likes investing in Software-as-a-service (SaaS) companies. She has a bachelor of arts in Economics, and her skills include email marketing.
Her written works have been published on Forbes and Inc Magazine. On Instagram, she has pictures detailing her life in New York. In one of her rap songs, she says that “following rules is for fools.”
Lichtenstein’s LinkedIn profile shows that he is a partner at a company called Demandpath and an advisor at SalesFolk, an email copywriting service. He holds a degree in psychology. A Facebook post shows that the two exchanged their engagement vows in 2019.
If Lichtenstein and Morgan are found guilty of conspiring to launder money and defraud the United States, they can serve up to 25 years in prison each.
As Lichtenstein and Morgan fight to prove they are not involved with the Bitfinex hack, a new report suggests that Ukraine is using Bitcoin to “crowdfund war.”
Ukrainian NGOs using BTC to “Equip the Ukrainian Army”
The report by Elliptic, a blockchain analytics firm, shows that non-governmental organizations in Ukraine are recording high donations in the leading cryptocurrency. The report comes when war between Ukraine and Russia is brewing and Russia has prepared its troops for a possible invasion.
According to the blockchain analytics firm, cryptocurrency donations are meant to “equip the Ukrainian army and fund cyberattacks against Russia.”
The firm added that “crypto donations” to Ukrainian NGOs grew nine-fold in 2021. Elliptic observed that donors prefer using the leading crypto instead of fiat currencies to bypass traditional financial institutions that might hinder such payments.
The groups that received crypto donations include one that focuses on medical equipment and the military. Another such outfit has connections with the country’s government. Other cryptos used to donate to Ukrainian NGOs include Ethereum (ETH) and Litecoin (LTC).