Topic: Bitcoin thief on Bitfinex exchange caught? (Read 521 times)

Caught and, as it has already become known, will be convicted in accordance with what the court proves. So far, he is a suspect, and his girlfriend or wife (I did not fully understand) was released on bail of $ 3 million (where does the money come from?). The guy was left behind bars, apparently he was not given bail. In general, this is a sad story because there are no winners in this situation. Unless only law enforcement agencies who managed to catch the suspects in that historical "theft of the century."

Yeah, sometimes we might say we don't believe that some of these exchanges are doing enough to keep investors or traders fund safe but I also believe that hackers are going all out to still have access to these exchanges so I don't think in this case it is a question of this particular exchange. See this List of Cryptocurrency Exchange Hacks and understand that it has been going on for a while now. Anyways, it was good news to know that they were eventually caught.

I've been reading shady news about this exchange for years, that's why I don't use this exchange, at this point I don't need to worry about them, but what has been making me no sleep Is when they talk for a long time about them and start talking about tether so I start to get worried because I use tether to trade and I can't get used to other stablecoin

You know, this whole thing seems a bit suspicious to me. First of all, those are not the hackers aka the thieves but rather the people who were supposed to launder the money somehow. Looking at the personalities and actions of those individuals, it is obvious that they are idiots. Low IQ mouth breathers who do not have the ability or knowledge on how to safely launder money without being detected. In fact, the girl is such a loudmouth clout-chaser, I am amazed they weren't caught sooner.

No, I suspect the real individuals behind this might have gotten cold feet or something went wrong and they needed a couple of useful idiots to take the fall in their stead. I think thats the most plausible explaination.

Their own mistakes got them caught, even though they committed a crime with enough detail and planned, but they left a trail that the FBI was able to reveal so that it directed evidence to the thief couple, I think no matter how great the theft is but still sooner or later they will leave a trail in its activities, what the FBI has done proves that crypto is not a safe place to carry out criminal activities and all arguments that say crypto can be used as a money laundering tool in my opinion now been refuted by this incident.

the cloud service had spreadsheets of the exchanges they used, login details. market order logs, and account statuses like "frozen" where by authorities already froze/seized some of the 25k split they did move..
but also the cloud service also had a file containing the private key of the 90k stash that didnt move for 5 years.
so the authorities seized it all

only a small subset (maybe $1m worth) actually got through and spent by the couple over the 5 years.
authorities have seized more then 90k btc but less than 119k btc

Am I the only one here taking this information with a pinch of salt?  Special agents always seem to find these the silliest way, as if the hackers were smart enough to hack the exchange and hide the money for 5 years but dumb enough to store private keys on their online accounts.  Every time I hear them specifically mention 'court-authorized search warrants' and explaining how legitimate their search was make me wonder if they really obtained the private keys from online accounts or used more invasive methods.  It is already known that 'special agents' have access to backdoors in most of our devices.  Were the hackers this dumb or are our devices more controlled than we think they are?

Anyway.  The scariest thing about being a hacker is that the traces you leave behind may one day reveal your identity so easily.  It is almost like an unknown DNA sample.  It is only about time before your identity gets revealed, and then you are screwed.

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Regards,
PrivacyG

The below referenced WSJ article, describes one of the keys that led to their capture. Apparently, one specific purchase they made was that of a 500$ Walmart gift card. The purchase was made in 2020, providing a Russian based email service, but using and IP from a provider in NY. The gift card was purchased using BTCs sent from an address that was amongst a cluster of addresses that the federal agents was investigating (I figure not the original addresses from the robbery, but derived through chain analysis).

The gift card was subsequently used from the Walmart App to purchase goods, and deliver them to their home address. Additionally, one of their real more frequent emails was used to tie the purchase/delivery cycle.

The agents managed to get access to the email account and their Cloud account (probably one led to the other), and eventually to the encrypted files, which contained access codes and BTC addresses of essentially all their assets (I can’t be sure if all this was hosted on Exchanges with multiple identities – some being their real ones-, or whether they has any hardware wallets – the latter is not referenced).

The way I see it, some of the internal keys to the chain of events are:
 
-   Chain analysis

-   The Walmart gift card reseller must have still had all the TX data (email, IP, BTC address, voucher code, etc.), and the agents gained access to this information (linking a monitored BTC address to a Walmart voucher code). It would be nice to know who the reseller was, and their alleged data policy.

-   Not quite sure on the ISP provider’s role, but he probably sent all available data too (the article does not make it clear if the NY provider was a plain ISP or a VPN provider).

-   The email account, used to redeem the gift card, seemed to be a real account that was made accessible to the authorities (i.e. gmail or alike, I figure).

-   The Cloud account was made accessible to the authorities (so either the keys were in the email, which I doubt, or the service is in a jurisdiction than can easily be accessed by the authorities through a court order or such).

-   The encrypted files on the cloud account were no match for the investigator’s cracking tools. Perhaps they had weakish passwords, or we’re more exposed than we believe.

There were human errors covering their tracks, possibly thinking they were pretty well in the clear, and not thinking through the Gift Card ties. Nevertheless, the investigators undoubtedly have powerful resources to link, monitor and even crack what one may naively believe is well hidden and protected.

See: https://web.archive.org/web/20220215224322/https://www.wsj.com/articles/bitcoin-bitfinex-hack-crypto-laundering-morgan-lichtenstein-11644953617

they were not caught because the blockchain revealed their ID

they were caught because they revealed their ID with exchanges.
where the exchanges noted the funds deposited with them had certain taint path to known stolen funds

Many people say that bitcoin is untracable and can be used for money laudering etc. This incident shows us that nothong is hidden on bitcoin blockchain and if you monitor it closely you can trace anyone.
I am happy that the bitcoin theif at bitfinex exchange caught and the bitcoins are recovered from him. Though, it took a lot of time but in the end the thief finally arrested.

Yea seems the news is true, I watched the news on my local television about this. To be honest, the fund should be returned to the address it was coming from, but still, there is a risk of lost funds or burning Bitcoin. Because it's quite important to ensure funds came from where and still they are active and the right person as well. So the processing isn't very easy IMO. But if Bitfinext takes legal action then I am pretty sure they will get back their funds. Like a sign from the address, funds came from and claim for refund to the FBI. Then they might verify and take appropriate action. It will hard to manage if hackers used Bitcoin Mixer. Anyway, the legal authority knows better than us, hope we will get the update soon.

Right now it is time for bargain. Now the officials will be in talks about the share. Probably they're the one to get the $400 million rewards announced by bitfinex. According to data 3.6 million bitcoins were lost. Now through this a small part of the idle bitcoin have been recovered and gets connected to the network. Users who haven't received compensation in the past could get benefitted through the recovery.

During those days hacks were very common. At time revealing some statements regarding exchange hacks were done to create panic and disturb the market. Nowadays the security breach isn't possible.

When money talks, everyone gets involved. But I think it will be returned to Bitfinex and they'll be the one to distribute it to the affected users during the hack.
AFAIK, they've made some solution just after the hack to let it know that those affected people have been compensated and now that the bitcoin's are back. Most of them will contest for bitcoin since the value from 2016 and today are way much different and bigger.

There's no way to make certain of this other than hoping that they return it to Bitfinix. Even if they do, I won't be surprised if they attach terms or conditions or even demands in order to return it. If only all hacks and stolen funds from exchange can be recovered like this with the culprit duly punished then crypto would be a lot more peaceful to get engaged in.

In addition to this news, I think the FBI is aldo collaborating with Binance to recover other hacked funds.

im guessing bitfinex will say "cheers IRS for returning over 100k coins to bitfinex,  but IRS keep ~10k coins with our thanks"

Im also that intrigued or interested to know on who would be the one would get that $400M reward for the return of Stolen 2016 Bitcoin.
https://www.bitfinex.com/posts/494

If Bitfinex had able to make out some refund then it is really just right that they are the ones who would really get those funds back in full and its just
shit that people who are trying to claim out that they should really be having some part. Lol

here is a hypothetical question (more of a satire question)

if they had ~120k coins. but only laundered 25k (21%)  where max prison time is 20 years for laundering. would it mean they only do 4.2years (21%) due to not laundering it all

if they had ~120k coins. but only had spent ~ 5k of the 25k without paying taxes (4%)  where max prison time is 4 years for tax evasion(defraud government). would it mean they only do 2 months (4%)

(im not asking seriously, im just asking hypothetically as a joke)

Weren't the losses refunded to the owners when the bitcoin was priced at 700 doolars? If so, the coins should be returned to the exchange. I don't trust the official versions that various news sources talk about either. I think we are being shown the wrong people for this theft.

The request for coin recovery to the FBI really must be fought for, because it is not only related to the interests and ownership of Bitfinex, but many members are harmed when some assets are hacked.
Data integrity, data confidentiality really must be maintained, hopefully scammers don't sell the data they get because it will harm Bitfinex users.

Herd on the news and moved the coins to the other wallet before, but the whole point is we cannot be sure about him because we all know the hackers usually sell the stolen coins with dirty wallets to other people that's how they decrease the risk of getting caught so even if someone really gets caught we cannot sure if the person is really the hacker or it's not the person who fought the wallet or the coins and this will take much more time to make sure about his really identify because the hacker who is that much start to get these coins out of the Bitfinex is surely smart enough to don't get caught easily.

In my opinion, the funds will be returned according to the procedures and lawsuits that have become Bitfinex rights as complainants against their clients. Based on the article shared by kryptqnick, it shows a little leak that it is likely that the funds will be returned to their rightful owner.

If the FBI actually detains and holds it without the right to return it, the FBI must automatically compensate for the losses that have been borne by Bitfinex.

For sure it would take a long time because it is the money that is stolen from an exchange. Not just a simple exchange but bitfinex was a big and well known exchange. They need to track each of the address using a crypto explorer and ask a proof from each users of the exchange if that was their addresses.

I just did quick search to find out if USA really ban cryptos and I found out that it was not true so they should not be scared communicating with the authorities if only they want their funds to get back. This was a good news by the way, nice to know that criminals now can be caught easily. This could bring confidence to the people that store their funds in the exchanges.

For sure there would be taxation or something but people wouldnt care about those deductions as long they could get something on what they have lost in the past at least even though it might be less but they do love

to see some assurance that they could really get something back into those hacking incident happen before which do cant really be avoided on seeing some hopes into these kind of situations.

Whether  they are given back the whole amount or partial plus having those deductions in taxes then it wouldnt really be matter much.

I don't know how anyone can believes official story how special agents lawfully seized this coins, and how Lichtenstein and Morgan kept private key unencrypted on their cloud account.
It's more likely that someone from their inner circle found out the truth and reported them to authorities, or they made some other sloppy mistake.
Either way I don't trust official story and I am expecting Bitcoins to be returned to Bitfinex exchange and not sold on the market by US officials.

I'm really glad that a very significant amount of money was recovered, and also the rhetoric of the Deputy Attorney General claiming that this proves that crypto's aren't a safe haven for criminals. Luckily, blockchain does ensure some transparency, and a successful seizure of funds hopefully shows not only that cryptos aren't great for illicit activities, but also that the existing AML measures are enough.
I wonder why the couple would try laundering sooo much money. It's well above securing a lifetime of funds for yourself and even children... A million or two would be enough for that.
Regarding the funds, allegedly, they'll try to return them:

FBI won’t return it to anyone because for them there is no rightful owner in illegal cases. They will only release it when they confirm the identity theft but that too on the court orders. So the owner in this case Bitfinex will have to fight the case for their clients; whose bitcoins or any assets that were lost in the hack.

Moreover, it’s not only about coins but also data integrity issue. So I’m not sure how they will bend the case really. But Bitfinex is the victim who should plead for the recovery of coins from FBI.

The activities that have been monitored for the last 5 years have caught them off guard and finally when greed begins to make them shop without realizing that everything is monitored in their every move. Several transactions share various addresses then the government, especially the FBI, investigates very carefully. The last hope is that everything is returned to the right party because it has been lost for several years. As a result, until now we do not know what the next action will be, such as the motives and people who are indicated to have a close relationship with the hacking.

Currently the US Justice Department has confiscated around 94,000 bitcoins from the case, if we look at it from a legal point of view, of course all the evidence will be returned to its rightful owner after the trial has been carried out, in this case Bitfinex is a platform that has the responsibility to return all the hacked assets to the users or owners, but what I wonder if the hacking case is revealed after quite a long time and we all know the FBI is one department that has great people and is supported by advanced technology, but it still takes time long time to catch the hackers,  great is it that the hackers are able to avoid the FBI?

Just a few posts above your there are answers to your questions  - is it hard to read a few posts? I guess you have some more important work to do...

https://bitcointalksearch.org/topic/m.59197512

Caught or not, compensate to users or not, it does not have effects on Bitcoin in the long run. Because the times when exchanges store all or most of their capital in hot wallets which are more vulnerable to hacks has gone away years ago.

Nowadays, crypto exchanges have better strategies and infrastructures to deal against hacks, compromise, fund stealing. Hackers can successfully hack and steal some fund but not enough to crack down any good exchange.

Also good exchanges do have enough reserved fund to compensate users and sacrifice their earnings from trading fees during few months. It's unofficially help them to build up reputation and in long run will help them to get more customers, then more income.

This is just proof that the authorities have very good tools with which they can trace every transaction, even if someone tries to use somewhat sophisticated methods to hide the traces. I didn't find out anywhere whether these people used mixers, but they used Wasabi for at least part of the coins - although they made a lot of stupid moves that exposed them. In this particular case, we could say that they took too big a bite to chew, and in the end greed and carelessness cost them their freedom. The sentence for such a crime is a maximum of 25 years in total, and even if they are sentenced to such a sentence, I am sure they will not be in prison for more than 15-20 years.

Here I also take several points that after the search and from the evidence that has been collected, the government and FBI staff definitely do not want to just return it. Bitfinex may soon provide data on victims who have suffered losses due to the hack. Even if Bitcoin is returned, it may take quite a long time and hamper the circulation of Bitcoin in the market because it is still in the hands of the FBI.

I don't know, I think this will still be complicated and difficult to solve, even if the stolen Bitcoins have been returned, but it is not necessarily a legal guarantee that the FBI will still hold Bitcoin as evidence that is still under their control.

Let’s just hope that the FBI would be returning the coins to the rightful owners and not keep it. Then As for the case of storing keys online, well they have been storing it online for so many years now, five years like the op has said? And no one has had access to it, except that the FBI took permission from court to be able to access their online Accounts and recover the private keys. If it wasn’t like that, then those keys would have been there and no one would have known about it.

Even if you decide to store your keys offline, there are still some risks that can be involved, you can even lose the paper where it is written or something might happened to the storage where you have stored it. So there isn’t really 100% safe option, it’s all about you knowing how to handle whatever option you take .

As long as those proven stolen or loss funds can show proof of their losses due to the hack then I think FBI should return it. They have no rights to touch it I guess, and its not a government property.  The process could be a long method but for sake of hope of those who losses fund then its better they make up for it. I wonder how FBI will manage this.

This could be a pump breaker for btc as the market turns green then suddenly this kind appear. Probably a scare again to community.

Just for the record, they are not the hacker or the bitcoin thief, the hackers were 2 Israeli Eli and Assaf Gigi.

They just laundered the bitcoin that has been stolen, and they tried to laundered some and even went as far as using fake online identities, depositing to dark market and other methods to hide their identifies. But US DOJ uses more sophisticated method to unravel the addresses and putting a connection to the physical address and names.

This comes from Bitfinex themselves:


https://www.bitfinex.com/posts/766

So for sure they are very much interested on what's left of the hacked bitcoins. So I'm sure Bitfinex is very happy of the news and it seems there are still a lot of bitcoin in the possession of the 2 person accused.

Regarding this question I think it will be a long journey to get the stolen money back to its rightful owner. They (the rightful owners) must be able to provide strong evidence that it really belongs to them. Because it will be difficult if you are faced with the government, everything must be in accordance with the processes and procedures that have been determined, I even think they can enter the courtroom until their money is returned.
If they do not have strong evidence to claim it is theirs, then they must be willing to have their assets (money) taken over by the authorities (back to the state).
Even more problematic, the US government has not legalized cryptocurrencies, and this is an obstacle because the government will also follow up on the owner for being connected to what is considered "illegal".

It amazes me that these hackers with great skills will make such bonehead moves like not knowing how properly store bitcoin/cryptocurrency.  The other thing that is really annoying about this is those bitcoin pundits who say "see bitcoin isn't anonymous and is hackable" which of course we all know bitcoin has never claimed to be as well as we know that it wasn't properly stored.  Super annoying smh. 

I am not in favor of the couple's activities here, but keys storing online? You are right, that's not a very safe way to store private keys. They should know better. Because if the agents haven't found those keys and they will make a stand that they lost the keys (but will get it once they are out of prison - just giving one scenario), they can still be rich after their sentence. But anyway, on the thought that FBI got a hold of multi-billion dollar heist is great! I don't know if Bitfinex already refunded their customers but if not, they have hope now to get it back.

it seems so. Today I read the article with some details on the Washington post.

https://www.washingtonpost.com/national-security/2022/02/08/bitfinex-hack-bitcoin-arrests/

I see a positive and a negative aspect in the news itself. after all it is possible to trace these epochal thefts ... Its like to steal a large amount of money in cash ... it is literally impossible to manage, to hide or exchange all of them for goods ...

It's hard to know what the US government or law enforcement will do with the stolen money, with the way they so easily take money via "civil forfeiture" all around the country. That would be the right thing to do, although there will obviously be an amount lost by the laundering techniques, you'd expect a large chunk of it to be recovered. As is so common, greed was the major downfall of these criminals, if they had figured out a way to just withdraw and keep a million dollars, it's very possible they could have lived a very comfy life but instead they wanted more and more.They could even have obfuscated their tracks by dumping large chunks of money on unsuspecting people and muddying the trail for investigators - but they wanted it all and will now likely spend a large part of their lives in prison instead.

It is somewhat ironic that they could attempt to launder such amounts, but could not figure out a safer way of storing private keys or recovery seeds, besides storing it online.

This should be determined after the money have been successfully recovered, although I think if the scammed users are to be refunded, it would be done with the exchange rate at the time of the incident and not now.[/list]

It's great that they have now been recovered; five years is a long time already. They could've moved or something, but the Feds managed to get them amazingly. They are getting better at it, which is good, so those affected in this hack could get what they deserve. Is that the next step for the exchange/fund recovered?

Neither Yes or no but if they would see that there are no claims or complaints then for sure they would really took possession of those coins but to think off that this news came out then those

Bitfinex exchange owners would really be poking up their memory that they do have some funds lost on this platform and this is where it do starts on trying to claim on what they do possess.

Lets see if they would grant it out and would be giving 100% of those money back or just partial.

A senior reporter at Forbes launched his article recently by presenting the news that a husband and wife in New York City are suspected of conspiring to launder $4.5 billion worth of bitcoins. We all know that Bitfinex in 2016 has lost $3.6 billion worth of Bitcoins, the rest have been recovered but there are still many remnants that have been the target of searching for years. Now that the news has surfaced, Joe Biden is getting demands to immediately authorize federal executives to regulate national security issues as soon as possible and make cryptocurrencies serious to continue to be monitored.
The facts that incriminate the two couples include the following:



Sources I read : Feds Seize $3.6 Billion In Stolen Bitcoin, Arrest Couple Five Years After Massive Crypto Exchange Hack

The question that comes to mind is do you think the FBI will return it to its rightful owner?