Bitfinex Hacker Details How He Pulled Off $4.5B Crypto Heist
Ilya Lichtenstein, who pleaded guilty last year to laundering billions stolen from crypto exchange Bitfinex, testified Tuesday on how he gained prolonged access to Bitfinex and looted user funds undetected for months.
Appearing as a cooperating witness in a money laundering trial in Washington, Lichtenstein mapped out the 2016 attack. The attack ranks as one of the largest crypto exchange breaches on record.
Key Details:
- Gained access to Bitfinex systems for an extended period.
- Also hacked accounts at exchanges like Coinbase and Kraken.
- Used the Bitcoin fog mixer 10 times to hide transactions.
- Struggling startup and burnout-prompted hack.
According to Bloomberg, Lichtenstein told jurors his struggling tech startup and mental fatigue ultimately provoked hacking Bitfinex. The hack netted nearly $4.5 billion in Bitcoin at the time.
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Once he gained access to Bitfinex’s networks, he managed to intercept customer credentials to access external accounts through password reuse.
Bitfinex hacker used Bitcoin Fog to conceal origin
The stolen funds were subsequently moved using services like Bitcoin Fog to conceal the origin of the assets. Lichtenstein testified that he used the mixer to launder tens of millions in crypto.
How the Spree Unfolded:
- Used information to drain Bitcoin from the exchange.
- Deposited loot across various crypto exchanges.
- Used mixers and fake IDs to cover tracks.
- Enlisted rapper wife Heather Morgan in laundering.
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Lichtenstein’s wife, Heather Morgan, aka “The Crocodile of Wall Street,” used various fake IDs to create online accounts to hide the money trail.
The Bitfinex hack of 2016 goes down as one of the biggest digital currency attacks on an exchange. Lichtenstein’s testimony provided insider details on how he pulled off stealing the money and then laundering the crypto over the years that followed.
