At the money laundering trial in Washington, Ilya Lichtenstein, who confessed to committing one of the largest-ever thefts of bitcoins from the Bitfinex crypto exchange, spoke about the details of his crime.
Lichtenstein, acting as a witness cooperating with the US government, admitted that for several months he had access to Bitfinex systems, as well as hacked accounts on other cryptocurrency exchanges, including Coinbase and Kraken. Last year, he and his wife, a well-known social media rapper, confessed to conspiring to launder money related to the Bitfinex hack.
Lichtenstein testified about how he used the Bitcoin Fog cryptomixer up to 10 times to launder part of the stolen funds. The US attorney's office accuses Roman Sterlingov of running a mixer, claiming that tens of millions of dollars from drug trafficking in dark markets passed through it. Sterling's lawyer claims that the court has no evidence, such as witness statements or server logs, confirming Sterling's involvement in the management of the mixer.
Lichtenstein's testimony helped to better understand the motives behind the 2016 Bitfinex hack and the methods used to launder millions of dollars. Lichtenstein told the jury that he decided to hack the exchange because of problems with his startup in San Francisco: "At the time, my business was going through difficulties, and I felt very burned out because of it."
At the time of the couple's arrest, the U.S. government said they were trying to launder $4.5 billion in stolen bitcoins, of which the government managed to withdraw $3.6 billion, the largest financial seizure in history. Later, almost $1 billion more was seized in connection with the Bitfinex hack.
After gaining access to Bitfinex, Liechtenstein developed a method for storing customer passwords so that they could be used to access accounts on other exchanges. He admitted that although he used various mixers (including Bitcoin Fog) to mask the origin of stolen funds, such platforms were used to launder only a smaller part of the funds. In some cases, Liechtenstein invested money in cryptocurrency exchanges using other people's accounts purchased on the darknet. It is noted that part of the stolen money went to buy NFT, gold and Walmart gift cards.
Lichtenstein also noted that he eventually stopped using Bitcoin Fog and switched to other mixers that "better suited his goals." One of them is Helix, run by Larry Harmon, who pleaded guilty in 2021.
Mr. Lichtenstein was questioned by Mr. Sterlingov's lawyer about whether he knew Mr. Sterlingov personally or had any contact with him. Liechtenstein said no. The lawyer also asked Lichtenstein if he was under the influence of drugs at the time of the break-in after he had previously confessed to buying illegal substances in underground markets. Lichtenstein said he wanted to stay sober during the break-ins.
In February 2022, US authorities arrested Ilya Lichtenstein and his wife, Heather Morgan, and seized more than 94,000 BTC ($3.6 billion) from them. In August 2023, they pleaded guilty to laundering these funds.
In February 2024, the US government transferred $922 million worth of bitcoins from two cryptocurrency wallets that held funds confiscated from the couple. The US transfers occurred on February 28, when Bitcoin surged above $60,000 for the first time since November 2021.
• Source:
https://www.bloomberg.com/news/arti...ya-lichtenstein-turned-us-cooperating-witness
