Dollar

United

Arkham

Dubai

Coin

A hacker compromised a wallet probably controlled by the United States government on Oct. 24. The wallet, which included funds seized from the 2016 Bitfinex hack, was drained of $20 million.
According to Arkham Intelligence, the attacker sent the funds to a wallet beginning with “0x348,” which included USD Coin (<a data-ct-non-breakable="null" href="https://cointelegraph.com/usdc-price-index" rel="null" target="null" text="null" title="null">USDC</a>), Tether (<a data-ct-non-breakable="null" href="https://cointelegraph.com/tether-price-index" rel="null" target="null" text="null" title="null">USDT</a>), aUSDC and Ether (<a data-ct-non-breakable="null" href="https://cointelegraph.com/ethereum-price" rel="null" target="null" text="null" title="null">ETH</a>).
The onchain analytics firm said the hacker has started converting the stablecoins into ETH and laundering the funds through addresses likely associated with a money-laundering service.
The attacker exploited funds seized by the US government in the 2016 Bitfinex hack, whose perpetrators — Ilya Lichtenstein and his wife Heather Morgan — face sentencing in November. 
<figure>
 <img alt="US Government, United States, Cybersecurity, Hacks" src="https://s3.cointelegraph.com/uploads/2024-10/0192c083-d447-7f5e-811a-3e67d1dd982a" title="">
 <figcaption style="text-align: center;">
 The malicious wallet behind the attack. Source: Arkham Intelligence
 </figcaption>
</figure>
Related: <a data-ct-non-breakable="null" href="https://cointelegraph.com/news/bitfinex-2016-bitcoin-hack-restitution-us-government" rel="null" target="null" text="null" title="null">Only Bitfinex may get restitution in 2016 hack, per government filing</a>
<h2 id="the-2016-bitfinex-hack">The 2016 Bitfinex hack</h2>
Lichtenstein hacked the Bitfinex exchange in 2016 and stole 120,000 Bitcoin (<a data-ct-non-breakable="null" href="https://cointelegraph.com/bitcoin-price" rel="null" target="null" text="null" title="null">BTC</a>) valued at about $8.2 billion at current market prices. The pair was <a data-ct-non-breakable="null" href="https://cointelegraph.com/news/doj-seizes-3-6b-in-crypto-and-arrests-two-in-connection-with-2016-bitfinex-hack" rel="null" target="null" text="null" title="null">arrested by US authorities in 2022</a>. 
Law enforcement officials seized the stolen crypto assets, which was the largest digital asset seizure by the United States Department of Justice at the time.
The couple <a data-ct-non-breakable="null" href="https://cointelegraph.com/news/couple-bitfinex-money-laundering-scheme-reach-plea-deal-prosecutors" rel="null" target="null" text="null" title="null">pleaded guilty to charges</a> of money laundering and conspiracy to defraud the US government in a July 2023 plea agreement with prosecutors, in exchange for lighter sentencing. At first, Lichtenstein admitted to laundering the funds, but later <a data-ct-non-breakable="null" href="https://cointelegraph.com/news/individual-charged-money-laundering-admits-hack-bitfinex-2016" rel="null" target="null" text="null" title="null">revealed himself to be the hacker</a> as well.
In an Oct. 9 filing, US prosecutors argued that Morgan should <a data-ct-non-breakable="null" href="https://cointelegraph.com/news/feds-ask-18-months-jail-bitfinex-hacker-heather-morgan-razzlekhan" rel="null" target="null" text="null" title="null">receive a lighter sentence</a> of 18 months in prison due to her cooperation with law enforcement. She was also deemed a “lower level” participant in the scheme and did not spend significant portions of the stolen funds.
Using this same rationale, prosecutors <a data-ct-non-breakable="null" href="https://cointelegraph.com/news/bitfinex-hacker-should-get-5-years-jail-for-120-k-btc-heist-feds" rel="null" target="null" text="null" title="null">recommended a five-year sentence</a> for Lichtenstein for orchestrating the hack. This recommendation was a drastic reduction from the 20-year prison sentence initially sought by prosecutors.
In the Oct. 15 court filing, prosecutors noted Lichtenstein’s cooperation with investigators and a lack of prior criminal history as reasons for a reduced sentence.
Magazine: <a data-ct-non-breakable="null" href="https://cointelegraph.com/magazine/rabby-scammer-konpyl-crypto-ceo-mountain-victims/" rel="null" target="null" text="null" title="null">Fake Rabby Wallet scam linked to Dubai crypto CEO and many more victims</a>

US government crypto wallets hacked for $20M — Arkham Intelligence

Table of Contents

Cointelegraph

Other articles published on Oct 24, 2024

Bitcoin ETF Inflows Cool Off After Seven Days of Strong Gains

Javy Dade's brand new single "NA NANANA" has just been added to Insane Labz official Spotify play...

Under $0.01 and Ready to Soar: This Token Is on the Same Path as Avalanche (AVAX) and Uniswap (UNI)

Canary Capital Submits Landmark S-1 Filing for Litecoin ETF with SEC

Will These Altcoins Outshine Bitcoin in 2026? A Look at Potential Market Leaders

Major US Exchange Kraken to Launch Own Blockchain

Join our free newsletter for daily crypto updates!