Often, life is stranger than fiction. No where is this truer than in the world of crypto. The story of the people who tried to launder away the Bitfinex hack money is emblematic of the same. The story came to light recently and has left the whole world, especially the crypto world, stunned.
Heather Morgan, who is a rapper together with her husband Ilya Lichtenstein – a cyber security expert, were caught laundering money from the Bitfinex hack. The amount involved $4 billion worth of BTC.
The money was being laundered through the sale of Uber rides, issue of gift vouchers, and sale of gaming consoles.
The Department of Justice (DoJ) caught on to the couple based on private keys that the couple had stored on the cloud. The keys held access to $3 billion worth of BTC. With no clarity on the exact modus operandi of the couple, several wild theories of how they committed the crime are floating around.
The Bitfinex hack happened in 2016. Hackers stole $4 billion worth of BTC or 120,000 BTCs. This was a huge heist and caused a major sell off. It has been established that Morgan and her husband are not the hackers. The hackers have still not been identified.
Bitfinex did everything it could to bring back confidence among the investors. It issued BFX tokens and also recovery tokens RRT. Issue of token was not as common then as it is now. Such measures helped Bitfinex continue to stay in the game. The issued token were a sort of IOU to the investors. Through such innovative steps Bitfinex was able to recover enough funds to compensate all the users affected by the hack.
The DoJ was watching the movement of the hacked BTCs closely. Around 90,000 BTCs worth $3.6 billion showed movement in Feb. The DoJ caught on to Morgan and her husband. DoJ coming into possession of so many BTCs however caused fears of a drop in BTC prices.
The BTC retrieved by the DoJ remain in a wallet. Bitfinex says that within 18 months it will use at least 80% of the funds recovered, to burn outstanding LEO tokens. The government will be monitoring all of this closely.