LEO token jumped 88% after DOJ seizes $3.6B tied to Bitfinex hack of 2016

Key Takeaways:

• Bitfinex exchange’s in-house LEO token jumped 88% after the Department of Justice recovered its $3.6 billion worth of stolen Bitcoin.
• The cuplrits could end up in prison for 25 years.

YEREVAN (CoinChapter.com) – Bitfinex exchange’s LEO token rallied over 88% and traded at $7.51 on Feb. 9. The upside move came in the wake of the U.S. Department of Justice (DOJ) catching the alleged
perpetrators of the 2016 Bitfinex heist.

The LEO buying pressure appeared after Bitfinex got a chance to return its users the $4.50 billion worth of Bitcoin, snatched from them six years ago. So, the token’s month-to-date returns surged to 116%.

Bitcoin theives arrested

DOJ arrested two U.S. citizens for alleged conspiracy to launder $4.50 billion in stolen cryptocurrency. Spouses Ilya Lichtenstein and Heather Morgan appeared before the federal court on Feb 8. However, the hearing details are yet to be released.

In detail, the 119,754 Bitcoin (BTC) stolen from the Bitfinex exchange appeared on Mr. Lichtenstein’s digital wallet, which the government was able to trace. At the time, a hacker breached Bitfinex’s security to initiate over 2,000 unauthorized transactions.

According to the agency, the Feds seized 94,000 Bitcoin out of the initially stolen 119,754, i.e., approximately $3.60 billion out of $4.50 billion. Deputy Attorney General Lisa O. Monaco asserted that the arrest would serve as a precedent for all who consider the crypto market an escape route from justice.

Also read: Crypto.com hack – 400 accounts were compromised confirms CEO Kris Marszalek.

Today’s arrests, and the department’s largest financial seizure ever, show that cryptocurrency is not a safe haven for criminals. In a futile effort to maintain digital anonymity, the defendants laundered stolen funds through a labyrinth of cryptocurrency transactions. Thanks to the meticulous work of law enforcement, the department once again showed how it can and will follow the money, no matter what form it takes.

commented the Deputy Attorney General.

Bitfinex heist

The charged spouses are deeply involved in the tech startup ecosystem. Lichtenstein, a dual citizen of the U.S. and Russia, is the founder and CEO of Y Combinator-backed sales software company MixRank. Additionally, Morgan is the founder and CEO of B2B sales startup SalesFolk.

Allegedly, the couple laundered the stolen BTC proceeds in the following scheme.

The culprits transferred over one-third of the stolen Bitcoins out of the mentioned wallet. Then, they implemented a process of making accounts with fake names and converting Bitcoins to other, more private digital currencies like Monero; a process known as “chain-hopping.”

The rest of the coins remained untouched.

Also read: Wormhole Protocol hacked: Attacker walks away with $320M.

In detail, DOJ charged the spouses with “conspiracy to commit money laundering,” and “conspiracy to defraud the United States”. The department did not officially accuse them of perpetrating the hack. However, the culprits could face 25 years in prison in case of the maximal sentence.

Meanwhile, Bitfinex expressed appreciation to the DOJ and reported on the future course of action.

If Bitfinex receives a recovery of the stolen bitcoin, […] Bitfinex will, within 18 months of the date it receives that recovery, use an amount equal to 80% of the recovered net funds to repurchase and burn outstanding UNUS SED LEO tokens.

said the exchange in a statement.