Bitfinex Hacker Turns State’s Witness in Bitcoin Fog Mixer Trial: Report - Crypto viral buzz

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Sunday 3 March 2024

Bitfinex Hacker Turns State’s Witness in Bitcoin Fog Mixer Trial: Report



Ilya Lichtenstein, the person behind the looting of billions of {dollars} from Bitfinex,  is now serving to federal prosecutors construct a case in opposition to Bitcoin Fog, a crypto mixing service.

Lichtenstein pleaded responsible to cash laundering fees final yr after hacking Bitfinex and getting away with Bitcoin price $3.6 million.

Lichtenstein Testifies in Washington Trial

Based on Bloomberg, Lichtenstein appeared in a Washington, D.C., trial this week the place Roman Sterlingov was accused of working a mixing service utilized by dark-web criminals. The Bitfinex hacker was named a cooperating U.S. authorities witness to fees referring to cash laundering related to the platform.

Lichtenstein advised the jury that he used totally different mixers, together with Bitcoin Fog, to obscure the stolen funds from the Bitfinex hack. He testified that he used the service about ten instances to launder funds. Nevertheless, he talked about that the platform was not his important cash laundering technique since he later moved on to different companies higher fitted to his function, resembling Helix.

U.S. authorities charged Sterlingov, a twin Russian-Swedish citizen, with working the money-mixing service. They accuse Sterlingov of receiving tens of millions of {dollars} from darknet markets related to trafficking unlawful medicine.

Tor Ekeland, Sterlingov’s lawyer, argues that no proof exists, resembling server logs and eyewitness accounts that hyperlink Lichtenstein to the platform. Ekeland additional pressed Lichtenstein throughout the trial on whether or not he knew or communicated with the accused, which he denied.

The lawyer then inquired about Lichtenstein’s drug use, referencing earlier testimony the place Lichtenstein admitted to buying mushrooms and LSD on darknet markets. Nevertheless, he clarified that he was sober throughout the hacks.

Sterlingov is going through a number of fees, which embody cash laundering, working an unlicensed money-transmitting enterprise, and interesting in cash transmission with out the requisite license within the District of Columbia.

Bitfinex Hacker Reveals Motive

Throughout his testimony, Lichtenstein highlighted the rationale for the Bitfinex hack in 2016, saying he confronted points together with his tech startup in San Francisco. He additional defined that throughout the time, he was burnt out from the struggling enterprise. Later, he recruited his spouse, Heather Morgan, to help in concealing the origin of the funds. Morgan, who known as herself the “Crocodile of Wall Avenue,” sought social media recognition by rapping about funding methods.

The federal government alleges that the pair utilized counterfeit identities to determine on-line accounts, masking the transaction path by depositing and withdrawing funds by cryptocurrency exchanges and darknet markets. Based on authorities assertions, some embezzled funds had been allotted to buy nonfungible tokens (NFTs), gold, and Walmart present playing cards.

In August 2023, Lichtenstein and his spouse formally pleaded responsible to cash laundering fees and conspiracy to commit fraud, ending a thriller that spanned seven years.

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