Prosecutors File Motion for Forfeiture of Assets Linked to Bitfinex Hack Defendants
On Wednesday, November 13, 2024, the United States Attorney for the District of Columbia filed a motion for the forfeiture of property linked to defendants Ilya Lichtenstein and Heather Morgan. The motion, filed in the US District Court for the District of Columbia, requests the court to enter a Second Amended Preliminary Order of Forfeiture pursuant to Federal Rule of Criminal Procedure 32.2(b)(2).
Lichtenstein is accused of orchestrating a sophisticated scheme that led to the theft of approximately 120,000 bitcoins from the Bitfinex exchange in August 2016. The stolen bitcoin was valued at around $71 million at the time of the hack. Following the theft, Lichtenstein, along with his wife and co-defendant Heather Morgan, allegedly implemented a complex plan to launder the stolen funds, utilizing various techniques to obscure the source of the money.
The motion follows a prior Amended Preliminary Order submitted by the government on October 15, 2024. The latest filing includes updates concerning the location of certain seized assets, which had been transferred as a result of criminal activities. The amended order also reorganizes some entries related to the seized properties and adds two new properties that have been confiscated during the investigation.
The government detailed that the defendants are still liable for the forfeiture of any property involved in or constituting proceeds from their alleged money laundering conspiracy.
One significant update relates to the recovery of stolen assets. On October 24, 2024, while law enforcement was converting approximately $20.7 million worth of seized virtual currency tokens, an unidentified attacker accessed the funds, resulting in a theft. Following the incident, law enforcement traced the transactions using public blockchain ledgers. Although the attacker was unable to liquidate the stolen assets completely, a portion of the funds was recovered and secured by law enforcement. As of October 25, 2024, the government reported recovering about $19.3 million, with an additional $1.2 million frozen by third-party providers.
The latest filing also categorizes seized funds by token type, reflecting the updates in the organization of the asset entries. Furthermore, it includes new entries for assets seized throughout the investigation. Notably, one entry details $43,354 recovered from the defendants’ residence during a search warrant execution in January 2022. Another entry highlights 2.42401 bitcoin seized from wallets linked to the defendants’ online storage, which were also found on an external hard drive at their residence.
The motion concludes with a request for the court to approve the Amended Preliminary Orders of Forfeiture for both defendants.
Please contact BlockTribune for access to a copy of this filing.
