US Government Wallet Drained Of $20 Million In Seized Assets In Suspected Hack

Over
$20
million
worth
of
seized
stablecoins
and


Ethereum

was
transferred
out
of
a
wallet
linked
to
the
US
government
in
what
is
being
considered
a
theft.

On-chain
analytics
firm
Arkham
Intelligence
revealed
that
the
attacker
sent
funds
tied
to
the
2016
Bitfinex
hack
to
a
five-day-old
wallet
address.

“$20M
in
USDC,
USDT,
aUSDC
and
ETH
has
been
suspiciously
moved
from
a
USG-linked
address,”
it
said
in
an
Oct.
24


post on
X. 

Hacker
Starts
Laundering
The
Government’s
Funds
Through
Various
Platforms

Shortly
after
the
transfer
out
of
the
government’s
wallet,
the
hacker
started
converting
the
stablecoins
into
ETH
through
addresses
likely
associated
with
a
money-laundering
service,
according
to
Arkham
Intelligence.

funds
are
going
to
instantly
exchanges
looks
nefarious

—
ZachXBT
(@zachxbt)

October
24,
2024

On-chain
sleuth
ZachXBT
said
that
some
of
the
funds
have
also
been
moved
to
instant
exchanges.
One
of
these
platforms
sources
its
liquidity
from
Binance,
the
leading
centralized
crypto
exchange.

US
Government
Seized
The
Assets
From
A
2016
Bitfinex
Hack

The
funds
involved
in
these
transfers
were
seized
by
the
US
government
in
the
2016
Bitfinex
hack.
Ilya
Lichtenstein
and
Heather
Morgan,
the
perpetrators
of
the
hack,
face
sentencing
next
month.

During
the
2016
hack,
Lichtenstein
stole
120,000
Bitcoin.
A
few
years
later
in
2016,
the
couple
was
arrested
by
US
authorities.
Law
enforcement
then
seized
the
stolen
assets,
which
consisted
of
USD
Coin
(USDC),
Tether
(USDT),
aUSDC
and
Ethereum
(ETH).

The
couple
pleaded
guilty
to
charges
of
money


laundering

and
conspiracy
to
defraud
the
US
government
in
2023.
This
was
part
of
a
plea
deal
with
prosecutors
for
a
lighter
sentence.

In
an
Oct.
9
filing,
prosecutors
argued
that
Morgan’s
cooperation
with
law
enforcement
justified
a
lighter
sentence
of
18
months
in
prison.
She
was
also
deemed
a
“lower
level”
participant
in
the
Bitfinex
hack
and
did
not
spend
a
substantial
amount
of
the
stolen
funds
either.

Prosecutors
used
the
same
rationale
to
recommend
a
5-year
sentence
for
Lichtenstein
for
orchestrating
the
hack.
His
cooperation
with
investigators
and
lack
of
a
criminal
history
were
also
mentioned
as
reasons
in
favor
of
a
reduced
sentence.
Prosecutors
had
initially
sought
a
20-year
sentence.

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