back to article FBI seizes $3.6bn in Bitcoin after New York 'tech couple' arrested over Bitfinex robbery

Two New York-based "tech entrepreneurs" were arrested on Tuesday for allegedly conspiring to launder $4.5bn in stolen cryptocurrency, the US Department of Justice said, adding it's so far recovered $3.6bn in purloined digicash - based on current prices. Ilya Lichtenstein, 34, and Heather Morgan, 31, husband and wife, are …

  1. Snake Silver badge
  2. Anonymous Coward
    Anonymous Coward

    Uploading the private keys to an illegal $5 billion crypto fortune to an American cloud provider has got to rank as one of the stupidest things it's possible to do.

    1. Doctor Syntax Silver badge

      Or a cloud provider in any other country where a search warrant could be obtained.

      It just goes to show that law enforcement can get results by simply using the age-old due process.

      And it also goes to show that somebody else's computer you don't control is somebody else's computer you don't control.

    2. Anonymous Coward
      Anonymous Coward

      The fact it was online at all to quote the film hackers was galactically stupid (ilya should be renamed joey)

      The fact it was on a server not under your own control an even bigger wtf

      I mean smart enough to hack/launder funds, dumb enough to not use a bulletproof provider, or have an offline stash.

      I mean it wouldn't be hard to have had a really hard to find backup, say on cassette, mixed in with a box of retro games, keys flashed to the user cert store on rfid cards, book cypher, buried usb key, copy sent to Russia, hardcopy with offset character substitution using a favourite integer etc. Nah fuck that will just keep it safe on dropbox

      1. Kane
        Thumb Up

        "I mean it wouldn't be hard to have had a really hard to find backup, say on cassette, mixed in with a box of retro games, keys flashed to the user cert store on rfid cards, book cypher, buried usb key, copy sent to Russia, hardcopy with offset character substitution using a favourite integer etc. Nah fuck that will just keep it safe on dropbox"

        Suspiciously specific...

        1. sungazer

          On a restaurant menu, numbers circled :D

  3. redpawn

    Which part of

    "Take the Bitcoin and Run!" were they not bright enough to figure out?

    Probably only get a slap on the wrist as they broke the $250M mark by more than an order of magnitude. Might even be Knighted.

    1. This post has been deleted by its author

  4. Howard Sway Silver badge

    So, Lisa Monaco nabbed Ilya Lichtenstein

    And now Andrea Andorra must be getting very worried.

    1. Doctor Syntax Silver badge

      Re: So, Lisa Monaco nabbed Ilya Lichtenstein

      After getting their Bitcoin tracing skills up to speed will the FBI work back further to trace the history of the loot before it was deposited in the exchange? It would be a shame to hand it all back if they can't be sure it was legit before it was nicked by these two.

      Cynical? Moi?

      1. Anonymous Coward
        Anonymous Coward

        Re: So, Lisa Monaco nabbed Ilya Lichtenstein

        sorry you didn't get the joke, old boy :p

        it was about small countries in europe: monaco, lichtenstein, andorra.

        what about valerie vatican or sammy sanmarino, are they involved too?

        [pedantic grammar nazi icon, but not allowed anonymously]

        1. Anonymous Coward
          Anonymous Coward

          Re: So, Lisa Monaco nabbed Ilya Lichtenstein

          Plus, all of them tax havens often used for money laundering....

        2. Doctor Syntax Silver badge

          Re: So, Lisa Monaco nabbed Ilya Lichtenstein

          "sorry you didn't get the joke, old boy"

          No, old boy. Intended to have been posted as a top-level comment, not onto existing thread.

    2. Little Mouse

      Re: So, Lisa Monaco nabbed Ilya Lichtenstein

      Which reminds me, where in the world IS Carmen Sandiego?

      1. Anonymous Coward
        Anonymous Coward

        Re: So, Lisa Monaco nabbed Ilya Lichtenstein

        With Wally obviously ....

  5. Phil Kingston

    Being done for laundering, but not the actual theft? Does that mean feds still aren't sure how it was done?

    1. Doctor Syntax Silver badge

      If the exchange was in HK a US court might not have jurisdiction over the theft.

      1. Joe W Silver badge

        Well, that's a new thing - don't the US think they have jurisdiction everywhere? Things like the cloud act seem like they do...

        1. Doctor Syntax Silver badge

          It might still have been a sticking point when they got to court. Go for the charge that's easiest to prove.

    2. Anonymous Coward
      Anonymous Coward

      I assume the feds know exactly how it was done, they just don't know who did it. So they arrested the fence, not the perp.

  6. Michael Hoffmann Silver badge
    Facepalm

    Am I a bad person...

    ... after watching 5 seconds of that video and thinking "karma is a bitch"?

    1. Andy 68

      Re: Am I a bad person...

      Yes.

      Because you lasted 5 seconds

    2. F. Frederick Skitty Silver badge

      Re: Am I a bad person...

      After managing twenty seconds I'm surprised she's not being charged for a lack of talent and crimes against good taste.

      1. I ain't Spartacus Gold badge

        Re: Am I a bad person...

        I'm surprised she's not being charged for a lack of talent and crimes against good taste.

        If those were really crimes, the prisons would be very, very, very full.

        Although filming Big Brother would become easier. It's just that when the public voted someone out, all that would happen is they would be moved to a different cell block.

    3. waldo kitty
      Facepalm

      Re: Am I a bad person...

      after watching 5 seconds of that video

      wait... you got to see it? it has been marked private, now :(

  7. cantankerous swineherd

    "one BTC sells for roughly $43,170"

    would be interested to see this happen irl. to be clear, not $43K handwavy funny money but 43K of the, er, real thing.

    1. Anonymous Coward
      Anonymous Coward

      value is gonna drop hard when they try to get rid of all of it. it might as well kill bitcoin. win-win.

    2. Anonymous Coward
      Holmes

      Tesla (not Elon) this year sold $272 million in Bitcoin and booked $101 million in profit.

      Dolla dolla bills Y'all.

      So, yes, you can get real money irl.

      How much is up to the markets. It's still a gamble.

      1. Doctor Syntax Silver badge

        The trick is choosing the time to get out.

  8. Anonymous Coward
    Anonymous Coward

    "by decrypting a file saved to Lichtenstein’s cloud storage"

    I'm much more interested to know what encryption method was used on the incriminating file.

    They must have had a whole lotta faith in the encryption method to put it in the "cloud" like that.

    Depending on how the file in question was decrypted it could dwarf the story of the billions in crypto taken.

    1. Wormy

      Re: "by decrypting a file saved to Lichtenstein’s cloud storage"

      Probably double-ROT13 on an Excel file with a password.

      Why would someone steal fake money from a system whose whole point appears to be to leave an immutable trail of tears^H^H^H^Hransactions?

      And if one did, why would the very first step not be to figure out how to convert to tangible assets, followed by a nice quiet trip to the Grand Caymans or wherever people go these days, now that the Swiss have given up on strict banking privacy?

      I imagine one could realize a few hundred $k of "foreign investment income" every year, declare it to the IRS and actually pay the taxes on their ill-gotten gains so they don't incur the wrath of that particular agency, and go on about their lives without drawing too much attention. Greedy people always make the stupidest mistakes though, it seems.

  9. Anonymous Coward
    Anonymous Coward

    20 years stir?

    I guess so, that video was bad

    1. Frank Bitterlich

      Re: 20 years stir?

      Her next lecture:

      "#102 | How to social engineer your way out of anything". Like jail, or so.

  10. Sampler

    What happens to the seized coins?

    Do they go back to the original owners?

    Do they get kept by the govt.?

    Are they just "cancelled", like one could burn paper notes?

    Just thinking throwing $5.6b (or whatever the current astronomical value is) back in to the system has got to have a fair bit of an affect on the valuation?

    1. amanfromMars 1 Silver badge

      Re: What happens to the seized coins?

      Three good questions there, Sampler .

      When the Feds keep the loot would that be akin to common theft and/or civil forfeiture and extraordinarily render them as no greater than modern day 0day pirates disproving that old adage that crime doesn't pay?

      That would be a Great Game Changer and herald a Quantum Shift in the State and Direction of Future Play introducing as it does, another unpopular enemy force rather than supporting ally.

      Who would know the definite answers to those questions, able to give everyone something they can rightly believe is honest and true?

      There is an inequitable anomaly highlighted in this tale though, and it is not at all funny, for whenever banks/bankers are caught laundering criminal proceeds hardly anyone is ever arrested to face jail time. The banks/bankers/perps just pay off the system with a chickenfeed fine from the greater stashes they have cashed and are holding for customer clients. It is never anything publicly preventative and privately punitive. And if that is acceptable and a default norm, then does justice and law enforcement have more than just a major systemic problem and a half to assess and address in order not to be realised as cuckolds and conveniently useless blunt tools being played as prime premium fools.

    2. gnasher729 Silver badge

      Re: What happens to the seized coins?

      Government will repay the value of the bitcoin at the time it was stolen. Then sell the rest to the highest bidder. Of course they can easily be "cancelled", just throw away the keys.

  11. Claverhouse Silver badge
    Unhappy

    Plus, As Usual...

    The American agencies can't help throwing themselves boastful compliments along the way.

    As indeed our Tory administration is wont to do.

    I dunno if Big Talking still impresses the simpler type of American rube trapped in the tent, but to normal people the effect is nauseating and tempting hubris.

  12. YetAnotherJoeBlow

    I read that the feds got their big break

    from The Alpha Bay seizure. Walked right into it.

    Always encrypt client side before storage anywhere.

    I imagine if it was encrypted on the cloud, it was as

    good as gone.

    Somehow I have a feeling the cloud is very leaky.

    After all, clouds make rain.

    1. chuBb.

      The cloud is marketing for timeshare

      It's still the same crappy servers and patching regime just someone else's job these days

  13. quadibloc2

    A Real Name

    I know that Lichtenstein is the name of a country - but it is also a surname. There was a famous artist, in the field of Pop Art, that had it as his last name.

    1. breakfast Silver badge

      Re: A Real Name

      Also a famous knight, as I heard it.

      1. Andy 68

        Re: A Real Name

        The Rock....

        The Hard Place....

  14. englishr
    Holmes

    Selection bias ?

    "Criminals always leave tracks, well, the ones we catch by following the tracks" said FBI Deputy Director Paul Abbate.

    1. My other car WAS an IAV Stryker

      Re: Selection bias ?

      "33. If you're leaving tracks, [it's safest to assume] you're being followed."

      --Howard Tayler, Schlock Mercenary in-universe tome of wisdom The Seventy Maxims of Maximally Effective Mercenaries

  15. DaemonProcess

    Monero not so secret

    The fact that they tried to hide behind the ultimate privacy coin Monero and were still found out tells you something about the crumbs you leave behind and watching out for the big picture, not getting too confident in your mathematical cryptography.

    Maybe the size of the trades. It may also be related to a reverse audit of the found BTC - get the details either side and dont worry about what went on inbetween.

    In the UK you can be forced to reveal the source of your sudden wealth or have it seized. Other countries just take it or torture you and your family until you hand it over.

  16. Kev99 Silver badge

    One more example of how utterly secure and hack-proof the internet is. I have no sympathy for those who use psuedo-money such as bitcoin, et al.

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