US Seizes $3.6 Billion in Bitcoin from NY Couple

    Image copyright: Elmar Gubisch/GettyImages [via Vice]

    The Facts

    • In the largest financial seizure in US history, the Justice Department recovered $3.6 billion in stolen bitcoin this week from a NY couple.

    • Ilya Lichtenstein and his wife, Heather Morgan, are alleged to have engaged in a long-running effort to launder the proceeds of 119,754 bitcoins stolen from Bitfinex, an online trading platform, in 2016.

    The Spin

    Narrative A

    This case proves once again that even the secretive and decentralized world of cryptocurrency isn't beyond the reach of the law. Law enforcement officials can successfully trace these crimes and eventually recover the stolen funds to be returned to their rightful owners.

    Narrative B

    This was a case of bad IT hygiene by the criminals, not security flaws in bitcoin. While all transactions are recorded on the public blockchain, authorities are unable to seize bitcoin unless they have access to the private keys and passwords protecting the accounts where it's held. In this case, as in earlier seizures in cases of ransomware, authorities were lucky to gain access to those keys.

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