Tracking Evolving Money Laundering Techniques through Darknet Marketplaces

On Tuesday, the US government seized $3.6 billion in bitcoin from the 2016 Bitfinex hack and arrested two individuals, Ilya Lichtenstein and Heather Morgan, on charges of money laundering. Tom Robinson, cofounder and chief scientist at the blockchain analytics firm Elliptic, breaks down how law enforcement was able to seize the BTC, what techniques the alleged money launderers used to avoid capture, and who could have pulled off the initial hack. Show highlights:

background on the 2016 Bitfinex hack who was arrested this week and why  how the US government gained access to the private keys in Lichtenstein’s and Morgan’s control why AlphaBay, a now-defunct darknet website, was crucial to law enforcement’s effort to track down the stolen Bitfinex funds what money laundering techniques were used to cash out the stolen Bitfinex funds before this week’s arrests whether, as blockchain analytics technology advances, it will always catch up to be able to trace the movements of crypto as its laundered  why using Monero, a privacy coin, to cash out stolen funds is a red flag why Tom does not think the two individuals arrested this week for money laundering the stolen Bitfinex funds were the original hackers

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Episode Links

Tom Robinson

LinkedIn: https://www.linkedin.com/in/tomarobinson?originalSubdomain=uk  Twitter: https://twitter.com/tomrobin 

Information on the Bitfinex hack + arrest:

DOJ Information: https://www.justice.gov/opa/pr/two-arrested-alleged-conspiracy-launder-45-billion-stolen-cryptocurrency  https://www.justice.gov/opa/press-release/file/1470211/download  Elliptic Coverage: https://www.elliptic.co/blog/elliptic-analysis-new-york-husband-and-wife-arrested-for-laundering-5-billion-in-bitcoin-stolen-from-bitfinex-in-2016  Unchained Coverage: https://unchainedpodcast.com/feds-seize-3-6-billion-in-btc-connected-to-bitfinex-hack/ CoinDesk coverage https://www.coindesk.com/policy/2022/02/08/us-officials-seize-bitcoin-from-2016-bitfinex-hack/  Decrypt: https://decrypt.co/92529/bitfinex-billion-bitcoin-who-keeps-it  The Defiant: https://thedefiant.io/bitfinex-leo-surge/ Bitfinex statement:  https://www.bitfinex.com/posts/766 

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