Justice Dept. says NYC couple arrested, accused of stealing $4.5 billion in bitcoin

Feb. 8 (UPI) -- Authorities have arrested a Manhattan couple accused of stealing $4.5 billion in bitcoin by hacking a virtual currency exchange, the Justice Department announced Tuesday.

In conjunction with the arrests, officials said that law enforcement seized bitcoin currently valued at more than $3.6 billion.

The married couple -- Ilya Lichtenstein, 34, and Heather Morgan, 31 -- were expected to make their first court appearance Tuesday. They face charges of conspiracy to commit money laundering and conspiracy to defraud the United States.

The money laundering charge carries a maximum sentence of 20 years, while the lesser charge carries a maximum of five years.

"Cryptocurrency and the virtual currency exchanges trading in it comprise an expanding part of the U.S. financial system, but digital currency heists executed through complex money laundering schemes could undermine confidence in cryptocurrency," U.S. Attorney for the District of Columbia Matthew Graves said in a statement.

Prosecutors said Lichtenstein and Morgan planned to launder some 119,754 bitcoin that were stolen after a hacker breached virtual currency exchange Bitfinex in 2016, causing more than 2,000 unauthorized transactions. Those transactions allegedly sent the stolen bitcoin to a digital wallet belonging to Lichtenstein, which were then transferred via a money laundering process to financial accounts controlled by the couple.

Law enforcement agents were able to seize more than 94,000 bitcoin that remained in Lichtenstein's digital wallet, valued at more than $3.6 billion.

The Justice Department said Lichtenstein and Morgan employed multiple money laundering techniques, including automated transactions, the use of darkness accounts, converting bitcoin to other forms of virtual currency and using businesses in an attempt to legitimize their banking activity.

"In a methodical and calculated scheme, the defendants allegedly laundered and disguised their vast fortune," said Chief Jim Lee of IRS-Criminal Investigation. "IRS-CI Cyber Crimes Unit special agents have once again unraveled a sophisticated laundering technique, enabling them to trace, access and seize the stolen funds, which has amounted to the largest cryptocurrency seizure to date, valued at more than $3.6 billion."