Bitcoin thief on Bitfinex exchange caught?

[kryptqnick]

I'm really glad that a very significant amount of money was recovered, and also the rhetoric of the Deputy Attorney General claiming that this proves that crypto's aren't a safe haven for criminals. Luckily, blockchain does ensure some transparency, and a successful seizure of funds hopefully shows not only that cryptos aren't great for illicit activities, but also that the existing AML measures are enough.
I wonder why the couple would try laundering sooo much money. It's well above securing a lifetime of funds for yourself and even children... A million or two would be enough for that.
Regarding the funds, allegedly, they'll try to return them:

As for the stolen funds, officials said they will work through the court system in the coming weeks in months to try and find if there are ways to return some of the money to victims targeted in the hack.

[dkbit98]

I don't know how anyone can believes official story how special agents lawfully seized this coins, and how Lichtenstein and Morgan kept private key unencrypted on their cloud account.
It's more likely that someone from their inner circle found out the truth and reported them to authorities, or they made some other sloppy mistake.
Either way I don't trust official story and I am expecting Bitcoins to be returned to Bitfinex exchange and not sold on the market by US officials.

[carlfebz2]

I don't think so, all return to the country, on the grounds that bitcoin is still illegal and if it is returned, the owner will definitely be subject to a large tax like in my country

For sure there would be taxation or something but people wouldnt care about those deductions as long they could get something on what they have lost in the past at least even though it might be less but they do love

to see some assurance that they could really get something back into those hacking incident happen before which do cant really be avoided on seeing some hopes into these kind of situations.

Whether  they are given back the whole amount or partial plus having those deductions in taxes then it wouldnt really be matter much.

[savetheFORUM]

Regarding this question I think it will be a long journey to get the stolen money back to its rightful owner. They (the rightful owners) must be able to provide strong evidence that it really belongs to them. Because it will be difficult if you are faced with the government, everything must be in accordance with the processes and procedures that have been determined, I even think they can enter the courtroom until their money is returned.
If they do not have strong evidence to claim it is theirs, then they must be willing to have their assets (money) taken over by the authorities (back to the state).
Even more problematic, the US government has not legalized cryptocurrencies, and this is an obstacle because the government will also follow up on the owner for being connected to what is considered "illegal".

For sure it would take a long time because it is the money that is stolen from an exchange. Not just a simple exchange but bitfinex was a big and well known exchange. They need to track each of the address using a crypto explorer and ask a proof from each users of the exchange if that was their addresses.

I just did quick search to find out if USA really ban cryptos and I found out that it was not true so they should not be scared communicating with the authorities if only they want their funds to get back. This was a good news by the way, nice to know that criminals now can be caught easily. This could bring confidence to the people that store their funds in the exchanges.

[naira]

FBI won’t return it to anyone because for them there is no rightful owner in illegal cases. They will only release it when they confirm the identity theft but that too on the court orders. So the owner in this case Bitfinex will have to fight the case for their clients; whose bitcoins or any assets that were lost in the hack.

Moreover, it’s not only about coins but also data integrity issue. So I’m not sure how they will bend the case really. But Bitfinex is the victim who should plead for the recovery of coins from FBI.

In my opinion, the funds will be returned according to the procedures and lawsuits that have become Bitfinex rights as complainants against their clients. Based on the article shared by kryptqnick, it shows a little leak that it is likely that the funds will be returned to their rightful owner.

As for the stolen funds, officials said they will work through the court system in the coming weeks in months to try and find if there are ways to return some of the money to victims targeted in the hack.

If the FBI actually detains and holds it without the right to return it, the FBI must automatically compensate for the losses that have been borne by Bitfinex.

[Leviathan.007]

Herd on the news and moved the coins to the other wallet before, but the whole point is we cannot be sure about him because we all know the hackers usually sell the stolen coins with dirty wallets to other people that's how they decrease the risk of getting caught so even if someone really gets caught we cannot sure if the person is really the hacker or it's not the person who fought the wallet or the coins and this will take much more time to make sure about his really identify because the hacker who is that much start to get these coins out of the Bitfinex is surely smart enough to don't get caught easily.

[AakZaki]

FBI won’t return it to anyone because for them there is no rightful owner in illegal cases. They will only release it when they confirm the identity theft but that too on the court orders. So the owner in this case Bitfinex will have to fight the case for their clients; whose bitcoins or any assets that were lost in the hack.

Moreover, it’s not only about coins but also data integrity issue. So I’m not sure how they will bend the case really. But Bitfinex is the victim who should plead for the recovery of coins from FBI.

The request for coin recovery to the FBI really must be fought for, because it is not only related to the interests and ownership of Bitfinex, but many members are harmed when some assets are hacked.
Data integrity, data confidentiality really must be maintained, hopefully scammers don't sell the data they get because it will harm Bitfinex users.

[fzkto]

I don't know how anyone can believes official story how special agents lawfully seized this coins, and how Lichtenstein and Morgan kept private key unencrypted on their cloud account.
It's more likely that someone from their inner circle found out the truth and reported them to authorities, or they made some other sloppy mistake.
Either way I don't trust official story and I am expecting Bitcoins to be returned to Bitfinex exchange and not sold on the market by US officials.

Weren't the losses refunded to the owners when the bitcoin was priced at 700 doolars? If so, the coins should be returned to the exchange. I don't trust the official versions that various news sources talk about either. I think we are being shown the wrong people for this theft.

[franky1]

here is a hypothetical question (more of a satire question)

if they had ~120k coins. but only laundered 25k (21%)  where max prison time is 20 years for laundering. would it mean they only do 4.2years (21%) due to not laundering it all

if they had ~120k coins. but only had spent ~ 5k of the 25k without paying taxes (4%)  where max prison time is 4 years for tax evasion(defraud government). would it mean they only do 2 months (4%)

(im not asking seriously, im just asking hypothetically as a joke)

[dunfida]

I don't know how anyone can believes official story how special agents lawfully seized this coins, and how Lichtenstein and Morgan kept private key unencrypted on their cloud account.
It's more likely that someone from their inner circle found out the truth and reported them to authorities, or they made some other sloppy mistake.
Either way I don't trust official story and I am expecting Bitcoins to be returned to Bitfinex exchange and not sold on the market by US officials.

Weren't the losses refunded to the owners when the bitcoin was priced at 700 doolars? If so, the coins should be returned to the exchange. I don't trust the official versions that various news sources talk about either. I think we are being shown the wrong people for this theft.

Im also that intrigued or interested to know on who would be the one would get that $400M reward for the return of Stolen 2016 Bitcoin.
https://www.bitfinex.com/posts/494

If Bitfinex had able to make out some refund then it is really just right that they are the ones who would really get those funds back in full and its just
shit that people who are trying to claim out that they should really be having some part. Lol

[franky1]

Im also that intrigued or interested to know on who would be the one would get that $400M reward for the return of Stolen 2016 Bitcoin.
https://www.bitfinex.com/posts/494

If Bitfinex had able to make out some refund then it is really just right that they are the ones who would really get those funds back in full and its just
shit that people who are trying to claim out that they should really be having some part. Lol

im guessing bitfinex will say "cheers IRS for returning over 100k coins to bitfinex,  but IRS keep ~10k coins with our thanks"

[nelson4lov]

I don't know how anyone can believes official story how special agents lawfully seized this coins, and how Lichtenstein and Morgan kept private key unencrypted on their cloud account.
It's more likely that someone from their inner circle found out the truth and reported them to authorities, or they made some other sloppy mistake.
Either way I don't trust official story and I am expecting Bitcoins to be returned to Bitfinex exchange and not sold on the market by US officials.

There's no way to make certain of this other than hoping that they return it to Bitfinix. Even if they do, I won't be surprised if they attach terms or conditions or even demands in order to return it. If only all hacks and stolen funds from exchange can be recovered like this with the culprit duly punished then crypto would be a lot more peaceful to get engaged in.

In addition to this news, I think the FBI is aldo collaborating with Binance to recover other hacked funds.

[tabas]

Im also that intrigued or interested to know on who would be the one would get that $400M reward for the return of Stolen 2016 Bitcoin.
https://www.bitfinex.com/posts/494

If Bitfinex had able to make out some refund then it is really just right that they are the ones who would really get those funds back in full and its just
shit that people who are trying to claim out that they should really be having some part. Lol

When money talks, everyone gets involved. But I think it will be returned to Bitfinex and they'll be the one to distribute it to the affected users during the hack.
AFAIK, they've made some solution just after the hack to let it know that those affected people have been compensated and now that the bitcoin's are back. Most of them will contest for bitcoin since the value from 2016 and today are way much different and bigger.

[romero121]

Right now it is time for bargain. Now the officials will be in talks about the share. Probably they're the one to get the $400 million rewards announced by bitfinex. According to data 3.6 million bitcoins were lost. Now through this a small part of the idle bitcoin have been recovered and gets connected to the network. Users who haven't received compensation in the past could get benefitted through the recovery.

During those days hacks were very common. At time revealing some statements regarding exchange hacks were done to create panic and disturb the market. Nowadays the security breach isn't possible.

[The Cryptovator]

Yea seems the news is true, I watched the news on my local television about this. To be honest, the fund should be returned to the address it was coming from, but still, there is a risk of lost funds or burning Bitcoin. Because it's quite important to ensure funds came from where and still they are active and the right person as well. So the processing isn't very easy IMO. But if Bitfinext takes legal action then I am pretty sure they will get back their funds. Like a sign from the address, funds came from and claim for refund to the FBI. Then they might verify and take appropriate action. It will hard to manage if hackers used Bitcoin Mixer. Anyway, the legal authority knows better than us, hope we will get the update soon.

[noormcs5]

Caught or not, compensate to users or not, it does not have effects on Bitcoin in the long run. Because the times when exchanges store all or most of their capital in hot wallets which are more vulnerable to hacks has gone away years ago.

Nowadays, crypto exchanges have better strategies and infrastructures to deal against hacks, compromise, fund stealing. Hackers can successfully hack and steal some fund but not enough to crack down any good exchange.

Also good exchanges do have enough reserved fund to compensate users and sacrifice their earnings from trading fees during few months. It's unofficially help them to build up reputation and in long run will help them to get more customers, then more income.

Currently the US Justice Department has confiscated around 94,000 bitcoins from the case, if we look at it from a legal point of view, of course all the evidence will be returned to its rightful owner after the trial has been carried out, in this case Bitfinex is a platform that has the responsibility to return all the hacked assets to the users or owners, but what I wonder if the hacking case is revealed after quite a long time and we all know the FBI is one department that has great people and is supported by advanced technology, but it still takes time long time to catch the hackers,  great is it that the hackers are able to avoid the FBI?

The activities that have been monitored for the last 5 years have caught them off guard and finally when greed begins to make them shop without realizing that everything is monitored in their every move. Several transactions share various addresses then the government, especially the FBI, investigates very carefully. The last hope is that everything is returned to the right party because it has been lost for several years. As a result, until now we do not know what the next action will be, such as the motives and people who are indicated to have a close relationship with the hacking.

Many people say that bitcoin is untracable and can be used for money laudering etc. This incident shows us that nothong is hidden on bitcoin blockchain and if you monitor it closely you can trace anyone.
I am happy that the bitcoin theif at bitfinex exchange caught and the bitcoins are recovered from him. Though, it took a lot of time but in the end the thief finally arrested.

[franky1]

they were not caught because the blockchain revealed their ID

they were caught because they revealed their ID with exchanges.
where the exchanges noted the funds deposited with them had certain taint path to known stolen funds

[DdmrDdmr]

The below referenced WSJ article, describes one of the keys that led to their capture. Apparently, one specific purchase they made was that of a 500$ Walmart gift card. The purchase was made in 2020, providing a Russian based email service, but using and IP from a provider in NY. The gift card was purchased using BTCs sent from an address that was amongst a cluster of addresses that the federal agents was investigating (I figure not the original addresses from the robbery, but derived through chain analysis).

The gift card was subsequently used from the Walmart App to purchase goods, and deliver them to their home address. Additionally, one of their real more frequent emails was used to tie the purchase/delivery cycle.

The agents managed to get access to the email account and their Cloud account (probably one led to the other), and eventually to the encrypted files, which contained access codes and BTC addresses of essentially all their assets (I can’t be sure if all this was hosted on Exchanges with multiple identities – some being their real ones-, or whether they has any hardware wallets – the latter is not referenced).

The way I see it, some of the internal keys to the chain of events are:
 
-   Chain analysis

-   The Walmart gift card reseller must have still had all the TX data (email, IP, BTC address, voucher code, etc.), and the agents gained access to this information (linking a monitored BTC address to a Walmart voucher code). It would be nice to know who the reseller was, and their alleged data policy.

-   Not quite sure on the ISP provider’s role, but he probably sent all available data too (the article does not make it clear if the NY provider was a plain ISP or a VPN provider).

-   The email account, used to redeem the gift card, seemed to be a real account that was made accessible to the authorities (i.e. gmail or alike, I figure).

-   The Cloud account was made accessible to the authorities (so either the keys were in the email, which I doubt, or the service is in a jurisdiction than can easily be accessed by the authorities through a court order or such).

-   The encrypted files on the cloud account were no match for the investigator’s cracking tools. Perhaps they had weakish passwords, or we’re more exposed than we believe.

There were human errors covering their tracks, possibly thinking they were pretty well in the clear, and not thinking through the Gift Card ties. Nevertheless, the investigators undoubtedly have powerful resources to link, monitor and even crack what one may naively believe is well hidden and protected.

See: https://web.archive.org/web/20220215224322/https://www.wsj.com/articles/bitcoin-bitfinex-hack-crypto-laundering-morgan-lichtenstein-11644953617

[PrivacyG]

• According to the DOJ on Tuesday, special agents obtained court-authorized search warrants to go through the couple's online accounts and were able to find files containing the private keys required to access a digital wallet containing 94,000 bitcoins representing about $3.6 billion in stolen funds.

Am I the only one here taking this information with a pinch of salt?  Special agents always seem to find these the silliest way, as if the hackers were smart enough to hack the exchange and hide the money for 5 years but dumb enough to store private keys on their online accounts.  Every time I hear them specifically mention 'court-authorized search warrants' and explaining how legitimate their search was make me wonder if they really obtained the private keys from online accounts or used more invasive methods.  It is already known that 'special agents' have access to backdoors in most of our devices.  Were the hackers this dumb or are our devices more controlled than we think they are?

Anyway.  The scariest thing about being a hacker is that the traces you leave behind may one day reveal your identity so easily.  It is almost like an unknown DNA sample.  It is only about time before your identity gets revealed, and then you are screwed.

-
Regards,
PrivacyG

[franky1]

The agents managed to get access to the email account and their Cloud account (probably one led to the other), and eventually to the encrypted files, which contained access codes and BTC addresses of essentially all their assets (I can’t be sure if all this was hosted on Exchanges with multiple identities – some being their real ones-, or whether they has any hardware wallets – the latter is not referenced).

the cloud service had spreadsheets of the exchanges they used, login details. market order logs, and account statuses like "frozen" where by authorities already froze/seized some of the 25k split they did move..
but also the cloud service also had a file containing the private key of the 90k stash that didnt move for 5 years.
so the authorities seized it all

only a small subset (maybe $1m worth) actually got through and spent by the couple over the 5 years.
authorities have seized more then 90k btc but less than 119k btc