US Government Crypto Wallets Hacked for $20M – Arkham Intelligence
On October 24, a hacker breached a wallet controlled by the United States government. A wallet containing the funds seized from the 2016 Bitfinex hack was drained of $20 million.
According to Arkham Intelligence, the attacker sent the money to a wallet starting at “0x348” which includes US Dollar Coin (USDC), Tether (USDT), aUSDC and Ether (ETH).
The onchain analytics firm believes that the hacker started converting the stablecoin to ETH and laundering the money through addresses linked to the money laundering service.
The attacker used funds seized by the US government in the 2016 Bitfinex hack, with the perpetrators – Ilia Lichtenstein and his wife Heather Morgan – facing sentencing in November.
The malicious bag behind the attack. Source: Arkham Intelligence
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The 2016 Bitfinex hack
Lichtenstein and Morgan hacked the Bitfinex exchange in 2016 and stole 120,000 Bitcoin (BTC), worth approximately $8.2 billion at current market prices. The pair were later arrested by US authorities in 2022.
Law enforcement officials seized the stolen crypto assets, representing the largest digital asset seizure by the United States Department of Justice at the time.
In a July 2023 plea deal with prosecutors, the couple pleaded guilty to charges of money laundering and conspiracy to defraud the U.S. government in exchange for a lighter sentence. Lichtenstein initially admitted to embezzling the money, but later revealed himself to be a hacker.
In an Oct. 9 filing, U.S. prosecutors argued that Morgan should receive a lighter sentence of 18 months in prison because of her earlier cooperation with law enforcement. She was considered a “low-level” participant in the scheme and did not withdraw a significant portion of the stolen funds.
Using this rationale, prosecutors recommended a five-year prison sentence against Liechtenstein for setting up the hack and stealing 120,000 BTC. This five-year recommendation is significantly less than the 20-year sentence originally sought by prosecutors.
In an Oct. 15 court filing, prosecutors cited Lichtenstein's cooperation with investigators and lack of prior criminal history as reasons for the reduced sentence.
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