Crypto Exchange Hacking Case Revealed, Authorities Confiscate Bitcoin Worth IDR 51.7 Trillion

US authorities confiscate Bitcoin worth IDR 51.7 trillion from the hack. (Cointelegraph)

JAKARTA – The United States (US) Department of Justice confiscated Bitcoin worth more than 3.6 billion US dollars or equivalent to Rp. 51.7 trillion. This follows the disclosure of a crypto exchange hacking case in 2016.

The value is the largest crypto seizure the agency has ever carried out. However, when it was stolen in 2016, the value was equivalent to 4.5 billion US dollars, equivalent to Rp. 64.6 trillion. The Justice Department also managed to arrest two suspects in the Manhattan area. They are suspected of trying to launder sales proceeds from the act, quoted from Barron, Wednesday, February 9.

The two suspects are Ilya Lichtenstein (34) and Heather Morgan (31), his wife. Both are scheduled to be in federal court Tuesday afternoon local time. They are suspected of laundering 119,754 Bitcoins which were stolen after a hacker hacked the Bifinex system. The suspect also carried out more than 2,000 illegal transactions.

Federal prosecutors revealed that the transactions were carried out in digital wallets owned by Lichtenstein. In the last five years, there have been 25,000 Bitcoins transferred from there by a complicated and lengthy laundering process.

The activity ended with some of the stolen funds being deposited into accounts controlled by the two suspects. Meanwhile, another 94 thousand Bitcoins are still stored in the suspect's wallet to receive and store the proceeds of the illegal hack.

Bitfinex itself has spoken out about the arrests and thanked the legal authorities for recovering most of the stolen Bitcoins. Furthermore, they have cooperated extensively with the Department of Justice (DoJ) since the investigation began.

Cases of theft of crypto assets are increasingly common. Blockchain research firm Chainalysis noted that crypto assets worth US$14 billion or IDR201.1 trillion were stolen last year mainly through DeFi or Decentralized Finance.

On the other hand, the Mt. Gox has also lost some 850 thousand Bitcoins worth 450 million US dollars, equivalent to Rp. 6.4 trillion recently. Of these cases, only 200 thousand Bitcoins were finally found. The Justice Department's findings on the Bitfinex case may increase the trustworthiness of digital assets for institutional investors.

“This will change the counterparty risk assessment that many ecosystems will have,” said Stephane Ouelette, CEO of FRNT Dinancial, a crypto derivatives company.