The United States government has moved nearly $1 billion worth of BTC holdings confiscated from the Bitfinex 2016 hack. After surrendering to the authorities, the hacker behind the attack became a U.S. witness and began cooperating with the government regarding investigative actions.
U.S. Government Transport Millions in BTC
In August 2023, the U.S. Department of Justice (DOJ) arrested Ilya Lichtenstein, the New York resident who orchestrated one of the biggest Bitcoin heists. He stole 119,754 BTCs through a security breach on Bitfinex. With Bitcoin’s current price surging to $62,000, the stolen funds are valued at over $7.4 billion. His wife, Heather Morgan, who aided in the exploit, has also been detained by the authorities.
Following the arrests, the DOJ seized 95,000 BTCs from Lichtenstein’s custody, valued at about $3.6 billion at the time of confiscation. Current on-chain data shows that the government has transported approximately 15,000 BTCs worth almost a billion dollars. The funds were moved to two Bitcoin addresses, one of which ranks #67 on the Bitcoin Rich List.
The action raises concern among Bitcoiners speculating that the government will cash out the large BTC holding, possibly dragging down the asset’s price.
Lichtenstein Says Bitcoin Fog Played a Key Role
A Bloomberg report shows that the infamous Bitfinex hacker is now supporting the U.S. government with investigations. Lichtenstein testified that Bitcoin Fog, a cryptocurrency mixer, was used about ten times to obfuscate the origin of some of the stolen funds. The hacker added that other crypto mixers that “suited his purpose better” were eventually adopted.
The hacker also explained that he exploited Bitfinex because of issues he was having with his San Francisco-based tech startup.
“At the time, my business was struggling and I was feeling very burnt out from it,” Lichtenstein said.
Despite its lengthened investigation, the U.S. government has yet to seize the entirety of the stolen funds from the couple.
